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From start-ups looking to legitimize their brand and professional presence to established companies that need to expand or relocate, negotiating a favorable commercial lease is critical for business success. 

Leasing space is typically one of the top three major expenses business owners face. However, even the most ideal-seeming location may become a liability if the contract itself does not include certain key tenant protections. 

1. Ensuring the lease is renewable

commercial contract may or may not include provisions for extending the original lease. Whether signing a short or long-term agreement, business owners should make sure the contract includes a renewal rights clause enabling the company to stay in the same location if desired. 

2. Securing right of first refusal

In some cases, a real estate owner may receive a third-party offer to purchase a property currently under lease. To avoid the potential need to relocate, business owners entering a contract on a promising location may want to negotiate for a right of first refusal. 

Under a typical ROFR, the tenant receives notification of any third-party purchase offers. The tenant then has the right to match the price and terms offered and buy the property themselves. 

3. Safeguarding against early termination

Even if a company is currently thriving, there is always a possibility that the business will need to relocate, downsize or face other unexpected financial difficulties before the lease expires. 

When negotiating a contract, business owners may want to request specific termination terms that allow for payment of a cancellation penalty in lieu of the remaining rent.