Owning and leasing commercial property is an exciting business. However, when looking for a new occupant, it’s important that you ask the right questions to ensure that your tenant is a good fit for your commercial property. This is why our team of commercial property lawyers have produced this list of commercial tenant interview questions so you can find the most suitable agreement for both landlord and tenant.
Overview:
- How profitable is your business?
- How long do you want to lease the premises?
- What is the potential lease timeline?
- Will there be retrofitting?
- Will the tenant want to resect the space?
- What are your hours of operation?
- What type of business are you?
- Will you be using any shared areas?
8 Commercial Tenant Interview Questions You Should Be Asking
1. How profitable is your business?
Oftentimes, the biggest mistake commercial landlords make is assuming that the business they are leasing to is profitable. While this can be a reasonable assumption, it isn’t always an accurate one. Therefore, the first two questions you should ask during the commercial tenant screening process are:
- 1. How long have you been in business?
If the business is established, it is reasonable to ask to see the business’ financial history to confirm their viability. If the business is a start up, you might want to reconsider or ask some more in-depth questions such as;
- 2. As a startup business, do you have a base of capital that you will be working from that will guarantee your lease?
In an instance of a start-up business, you may want to ask for a co-signer for the lease. Alternatively, you may want to limit the lease to a shorter period with caveats to either continue the lease or enter into a new lease agreement after you have proof that the business can make the rental payments each month.
Once you determine the financial stability of the potential tenant, then it is time to move on to the next commercial tenant interview question.
2. How long do you want to lease the premises?
As the landlord, you need to know how long the tenant plans on leasing the space for. You also need to ask if they want an option for first renewal before the property is placed on the open market after the lease ends.
3. What is the potential lease timeline?
Will the lease take into account the time needed by the tenant to set up the business within the space allotted? If so, will this time be allotted at the same rental rate per square foot? How many months will the overall lease encompass? By asking these questions you’re ensuring that the potential tenant is prepared for the undertaking of the lease and will avoid any frustrations in the future.
4. Will there be retrofitting?
When preparing your commercial tenant interview questions make sure you check to see if your tenant will require changes to the property to meet specific codes and regulations.
For example:
- Entrances and exits that allow for access for disabled clients
- Appropriate number of male, female, family-style or gender-neutral bathroom facilities
If this will be a need, you will need to establish who will be responsible for the cost of making these necessary changes.
5. Will the tenant want to resect the space?
Will there be a need for painting or minor construction to fit the space for their business? Who will be responsible for the quality of work, cost of supplies and contractor’s services?
6. What are your hours of operation?
Depending upon the area your commercial property is located, you will need to be sure that the tenant’s hours of operation are within the codes and regulations for your zoning laws.
7. What type of business are you?
This may seem like an unnecessary question, however it is important to verify that the type of business that will be going into your building is legal and that it fits within the types of businesses the area is legally zoned for. If you need help establishing what is or is not a legal business, find out more from our commercial lease lawyers.
8. Will you be using any shared areas?
If your commercial space has a shared area, such as a lobby or cafeteria, be sure to carefully explain the rights and responsibilities for these areas to your tenant. Give the prospective tenant a written document that outlines their particular rights and responsibilities with regard to the use and maintenance of these common spaces. Be sure to inquire into the tenant’s full understanding and willingness to abide by the policies that are in place.
Where to next?
It is highly advised that you speak with professionals that deal regularly in the leasing of commercial properties, so please get in touch with our experienced commercial lawyers. You may also want to consult with other industry professionals such as:
- Real estate agents
- Other landlords
- Commercial conveyancers
- A solicitor that specialises in the leasing of commercial properties
If you have any questions about the commercial tenant interview questions you should be asking a future tenant, or any other legal issue, please contact the law offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.