ForumsStarting a Business

Welcome to this web site and good luck with your women clothing store.
Do you have a Business and Marketing Plan?? Do you know about SCORE?? SCORE is FREE.
Do you have a Lawyer. Every business person should have an Accountant, a Lawyer and an Insurance Broker.
You say that "The initial offer from the potential lessor is fair and a good starting point"
One: Continue talking to the landlord, Two, Talk to your Lawyer and MOST of all
(as Lighthouse said recently) let the landlord feel like he has helped and been MORE than fair.
Good luck, LUCKIEST

The longer the term of the lease, the bigger the percentage of alterations and improvements the prospective tenant can expect the landlord to pick up the tab for. I'd certainly expect the landlord to provide electrical and plumbing systems (including HVAC equipment) that were fully functional if this were a three-year lease. If your store design demanded a higher capacity system, then you might be expected to pay for a significant portion of that upgrade -- but if the existing unit would be adequate (if it only worked), it would be an exception rather than the norm for you to bear half the cost of fixing it.

As I said in the post Luckiest referred to, maybe he is just "pitching high" -- hoping you'll agree (but not really expecting you to). Along that same line, who is responsible for maintaining the unit (keeping it operating) once it is repaired or replaced? If you're expected to pay for any part of that (filter changes, annual cleaning/servicing, routine adjustments, etc.), then it's reasonable to ask that he provide a unit that's in good shape to start with. That might be a negotiating counterpoint you can use.

Hope this helps. Best of luck!

Has anyone actually encountered this scenario in a lease negotiation? Anymore insight would be appriciated.

you are absolutely correct to insist (diplomatically) that the air conditioning be serviceable when you move in.

As to the 5 year / 3 year question, I understand your concern (in case the biz doesn't succeed, or you need to move for some other reason). However, you may want to consider how being forced tom move may effect your business. (The need for your customers to find you, again, etc.).

May I suggest 3 years with three 3 years renewal options. Also consider what standard is reasonable to tie the rent increases to when renewing the lease.

Or...Perhaps he will allow you a 3 month move notice "escape clause" if you sign for 5 years.

Addendum: Records show that a woman's dress shop is one of the most likely businesses to fail. I don't mean to be negative...just providing info.