There are numerous matters which arise in negotiating a commercial property lease in the greater Vancouver area. The memorandum at the end of this article will provide a general framework of the process and raise some of the more common issues to be considered by a tenant. There will of course be many circumstances where some comments may not apply.

Usually, a tenant will find and work with a commercial realty agent to locate suitable premises. It is vital to appreciate that unless you decide to pay the realty agent for his services, which is usually not the case, the realty agent will be paid by the owner of the property being leased. Alternately, the agent working with the tenant will share a commission paid by the owner to the listing agent engaged directly by the landlord.

In either event, the realty agent has a primary legal and fiduciary duty to act in the landlord’s best interests. Always keep this in mind, and consider carefully any disclosures you decide to make to the agent regarding your bottom line or other business or negotiating considerations. The realty agent will be legally bound to disclose to the landlord and its listing agent, anything which you disclose to him pertaining to the negotiation of the lease.

There is no substitute for preparation in looking for suitable premises. It is up to you to gather as much information as you can relating to the price per square foot for base rent, location, premises, zoning, proximity to public transportation (if important for employees or customers), and other factors material to you in assessing what location is best for your business. Do not merely take the realty agent’s word on any matter and make sure that where possible, obtain independent verification from municipal or other sources.

The key document in the entire lease process is the Offer to Lease (the “Offer”). It is typically prepared by the landlord’s realty listing agent and while incorporating the business terms of your offer, will reflect the landlord’s interest. The landlord’s lease will, if the deal moves ahead, be modified to incorporate the key terms of the Offer.

You will be under considerable pressure to sign the Offer to Lease before you can see your lawyer. Often, the realty agent will add to the pressure by indicating that other offers from competing prospective tenants are coming. While at times this may be the case, appreciate that the agent’s interest is to get the landlord the best offer, from the best tenant possible. Remember at all times who the agent (in most instances) is acting for—the landlord. The agent wants to complete the deal as quickly as possible, so as to receive its commission from the landlord and move on to the next deal.

Further details can be found in the following attachment Memo to Clients-Leasing Dec 0815