In my role as a legal and small business adviser over the years, I have learned that there are more similarities than differences between the various types of businesses and the problems they face. Many of my clients share the same concerns and issues when it comes to issues with: accounting & bookkeeping, marketing, HR & personnel as well as problems with customers, vendors and suppliers. Many of these problems are the direct result of honest miscommunications rather than the manipulation or someone’s intentional efforts to take advantage of another party.
One of the most common examples of how miscommunications lead to big problems in a small business relates to leasing and renting. It is common for business owners to try to save money by writing their own lease agreement or by downloading one from the internet rather than hiring an attorney to draft an appropriate lease that actually fits the needs of the situation. On the flip-side of the coin, it is equally common for a tenant to be given a lease and just signing it rather than having it reviewed by an attorney. No matter what side of the deal you are on, inevitably not having an attorney do a basic legal review will lead to big problems in the future.
There are many examples of bad lease provisions that I have seen over the years that would have cost my clients tens of thousands of dollars had I not caught them in the negotiation stage of the process. Some examples are issues relating to: internal maintenance, building structure and roof replacement, payment of taxes, internal improvements, external upkeep, ownership rights to fixtures and equipment and many more.
Another very important thing to understand with property leases is that there are major differences between leasing a family home and a building for business purposes. If you rent a house or an apartment, the default provision is for maintenance and repairs to be the responsibility of the landlord. This is the opposite for business leases. Unless you specifically negotiated with the landlord for repairs and maintenance to be his responsibility, you are responsible for these issues.
With building rentals, it is also important to make sure that you do your due diligence investigations before signing since you will want to make sure the structure is compliant with any applicable building, zoning or health codes and that there are no problems with the structure that would require you to repair or be responsible for.
Unfortunately, the majority of the time clients come to me for help is after they have signed the contract and the problem has occurred. Although it is possible to negotiate at this time, it is extremely difficult to do so once a legally binding contract is formed. Many of these cases end up in litigation or mediation. The bottom-line is that all business or legal contracts should be reviewed by an attorney before signing. The cost to pay for this basic service is tiny in comparison to the cost of litigation or other negotiations to resolve the conflict. We need to clearly explain to the business owners that leasing a business space does not make the landlord responsible for the issues inside the building.
If you are an existing small business owner or an aspiring entrepreneur who has never before sought the counsel of an attorney with your business or legal matters, I strongly urge you to reach out to a business attorney before taking any actions that could harm your business. Our office is always available for consultations relating to your business and legal needs. Please call Marvin Law Office at 616-450-2981 to schedule a consultation so we can help you avoid legal pitfalls and advise you on the successful operation of your business.