When you’re preparing to open a shop in New York City, you’ll be balancing a lot of logistical details amidst the excitement. From determining the aesthetics of the interior to understanding alteration approvals, you can’t afford to ignore established guidelines and potential costs. If you do, you could risk delaying your opening and incur unexpected financial burdens.
Let’s unpack six of the most common lease clauses that can affect your NYC shop buildout.
1. Required Landlord Approval for Alterations
Are you hoping to remove a wall or upgrade the plumbing in a NYC space you’re leasing? Or do you want to refinish hardwood floors and install a bar? You’ll need to run it by your landlord for approval first. It’s not uncommon to find fine print in a lease agreement that indicates you must seek approval before making structural alterations. Further, you’ll need to be patient, as gaining approval for significant renovations can take weeks or longer.
You’ll need detailed drawings of intended revisions, plus there will be a vetting process for any contractors you want to hire. Be sure to check the requirements in your lease agreement so you know what to expect. To ensure your plans comply with lease requirements and gain approvals efficiently, consult NYC commercial real estate lawyers who can assist with documentation and guide you through the approval process.
2. Compliance with Safety Codes
When you’re making any sort of building alteration in NYC, you can expect rigid codes to guide your decision. And as a tenant, you may need to be the one ensuring compliance during an upgrade. This means adhering to fire code requirements, ADA expectations, and more. You’ll need to budget time into your planned timetable for inspections and potential design changes to accommodate recommendations.
3. A Use Clause
Think of a use clause as a statement that outlines what you’re allowed to do in a leased space. In other words, if a lease clause specifies that you can operate it as an antique shop, it may also indicate that you’re not allowed to use the space to prepare and sell food as a restaurant. The reason for this is that the space, including the plumbing and ventilation systems, may be designed to handle certain functions but not others.
A use clause helps protect the landlord’s property by limiting the activities that can happen within it. Prior to signing a lease, it’s important to review the use clause and understand if the space is a fit for your business plan and operational needs.
4. Improvement Cost Coverage
When you’re pursuing a buildout, you’ll want to be clear about cost coverage. In other words, will you be responsible for paying for materials or covering contractor costs? You’ll want to check for terms in your lease agreement so you don’t encounter costs you weren’t anticipating. If the cost-sharing puts more financial burden on you, you may need to rethink the quality of your upgrades.
5. Expectations at the End of a Lease Term
While you may have the freedom to make structural and cosmetic changes to a space during the lease, you may need to return it to its original condition at the end of a term. Depending on what changes you make, this could be a big undertaking. If you’ve added shelving, new floors, or built-in seating, for instance, you’ll need help with the reconstruction.
Find out what the expectations are upfront. Knowing the terms will help shape what alterations you make. If you’re mulling over custom countertops, you might change your mind if you’ll be required to scrap them after your lease is up.
6. Signage Requirements
The sign outside your business sets the tone for your brand. But when you’re leasing space, you’ll need to conform to the requirements in your lease agreement. These terms can dictate anything from the size of a sign to its location, so it’s best to find out what you’ll need to do in advance. After all, you don’t want to pay for a shiny new sign that violates the building or lease requirements.
Pursue a Successful Shop Buildout
Introducing your business to the bustling NYC community can be exciting, but you’ll need to be mindful of your lease terms.
Understand what restrictions are in place for alterations, and know who will be footing the bill. Adhere to safety code requirements and know what the space will need to look like when your lease is up. Being clear on the lease terms can help avoid headaches and delays for your new business.
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