Growing your business in Nigeria might include you renting the right commercial property in Nigeria that’ll fit your business needs. As exciting as this change might be, signing a business lease is just plain scary.
A business lease contract in Nigeria often takes a number of years depending on the type of contract you want, either a short term or long term lease. Your business space can either make or break your business, with this said, you should never take a commercial lease for granted in Nigeria.
As a business owner in Nigeria, a lease is usually one of the important contracts you’ll sign and a single paragraph of unclear language can make you close down your business. Your business should never be hindered by the physical space you occupy imagine in a case you want to move your business from the Lagos mainland to the island, but because of a term in your contract that might seem impossible.
To help you not fall into the trap of some dubious landlords in Nigeria, here are 10 important questions you should ask before leasing a commercial space.
- 1 1. How much space is available?
- 2 2. Who is the landlord and how long will the lease run?
- 3 3. How much is the rent and how often will it go up?
- 4 4. Can you sublease?
- 5 5. Can you renew the contract?
- 6 6. What building services do I get?
- 7 7. Who pays for improvements?
- 8 8. Who are the neighbours?
- 9 9. How is the electricity supply?
- 10 10. What happens when the landlord goes broke?
1. How much space is available?
The amount of space available will determine if the commercial space will be the right fit for your business. If you choose a space based on the number of employees you think you’ll have a year from now, you could easily outgrow the space before the lease is up. Commercial specialists advise business owners to opt for more space than less because they can probably sub-lease any surplus space later on.
CHECK: LAND FOR SALE IN LAGOS
2. Who is the landlord and how long will the lease run?
You need to be sure who your lessor is so you’ll know who you are dealing with and also how long the lease will run. In Nigeria today, a lot of fraudulent people claim the owner of certain properties so as to dupe innocent individuals so you have to be careful. Also, landlords try to pin down tenants to the longest leases they could get, to keep vacancies to a minimum. Typically, commercial leases run anywhere from 3 to 10 years and make sure the term is negotiable with the landlord.
CHECK OUT: LAND FOR SALE IN LEKKI PHASE 1
3. How much is the rent and how often will it go up?
Making enquiries about the lease cost and how often it is expected to increase is vital before you sign that lease contract. Rent is a fairly inflexible overhead but recently rent costs in Nigeria have gotten so unpredictable business owners are finding it hard to catch up. Asking this question helps you prepare yourself before taking the leap.
4. Can you sublease?
Questioning your landlord about this is quite crucial in a case you realise the office space does not suit your business or if space is bigger than what you projected. If the property owner agrees to this, you’ll have to find a new tenant who meets the same standards that the owner applies to other tenants.
5. Can you renew the contract?
Once your contract expires, the lessor is under no legal obligation to offer that space to you only if both parties agree to some renewal formula and have a clause that guarantees you’ll get first rights to space when your lease expires.
6. What building services do I get?
You need to ask the landlord what building services you are to get if you decide to pick his building and if you are comfortable with the services, make sure it is included in the contract.
CHECK OUT: LAND FOR SALE IN IKOYI
7. Who pays for improvements?
Most times in Nigeria, the tenants pay for improvements especially when they want the office space renovated. It is safe to have a prior knowledge of what improvements the landlord is ready to take on and what the tenant will be paying for.
8. Who are the neighbours?
This question is quite important as it can affect the image of your business. How would you feel if a close competitor moved in next door?Or a business that generated strange odours or loud noises?Or one that attracted unsavoury people? You have to make enquiries about the individuals/ business you’ll be sharing the building with and if you are comfortable with it.
CHECK OUT: LAND FOR SALE IN ABUJA
9. How is the electricity supply?
The power supply situation in Nigeria has bankrupted a lot of business, so it is quite vital you ask about the state of the electricity in the building so your business won’t be powered by generator throughout the day.
10. What happens when the landlord goes broke?
If you don’t want to enter a once chance situation, you had better make enquiries. There was the story I once heard of a doctor who leased a space and spent millions of naira of built in equipment and renovations. But unfortunately the owner of the building had taken a loan and used the building as collateral and the bank came to claim it when he couldn’t pay to leave the doctor in a very messy situation. Before signing the contract, making sure the lease contained a standard “recognition” or nondisturbance clause.