Securing Commercial Lease is easier with Tenant Representation
January 13, 15
It's widely known that commercial leases are harder to secure than residential ones. This is because landlords usually take into account a whole bunch of criteria before deciding whether the tenant's application is strong enough to lead to the signing of the lease contract. While creditworthiness is arguably the most important thing that landlords consider, there are other factors that can also prove the applicant's ability to meet their liabilities. This article presents the differences between commercial and residential lease, and explains how tenant representation increases the likelihood of securing commercial lease.
Creditworthiness is key
Creditworthiness is perhaps the single most important factor that both commercial and residential lease have in common. Prospective commercial lease tenants often believe that landlords will expect their corporate credit to be strong, while in fact it's their person credit score that matters. Landlords examine the credit history of prospective tenants because they know that they had to sign personal guarantees to open their startups.
How then is commercial lease different from residential lease?
One major distinction between both types of lease is the possibility given to prospective corporate tenants to submit additional documents if their personal credit score is too weak. For instance, the applicant may give a letter explaining why their credit score is low, and stating that they own enough assets that can serve as guarantees. For residential lease, this clearly would never fly and results in the rejection of the rental application. Other criteria that landlords consider in commercial lease applications are the duration of the lease and the cost of leasing the commercial space.
Why use tenant representation?
It takes industry knowledge to secure a commercial lease, especially since there's no standard way of qualifying. By using tenant representation services, you can be certain that an expert will be doing the dirty work for you, while you're running your business. Some landlords have specific reservations that need to be addressed before the issuance of the contract. These are things that the average entrepreneur will hardly be able to do, which is why they should delegate them to a qualified professional.
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