What You Ought to Know Before Signing A Commercial Lease

A commercial renovation can be an exciting venture but overwhelming at the same time. You could be launching a business of your dreams our expanding on a dream you’ve already brought to reality.

A commercial renovation can be an exciting venture but overwhelming at the same time. You could be launching a business of your dreams our expanding on a dream you’ve already brought to reality. Congratulations.  

At Verona Building Partners, we are a licensed commercial contractor in Mississauga specializing in helping with commercial general contracting, construction management, and project management. Our qualified team helps your renovations stay on track and within budget, whether you’re completing an office build-out, a restaurant, or retail space.  

This article is based on the greater Toronto area but has relevance to any part of the country. The majority of Canadian provinces based their code on guidelines from the National Building Code of Canada.  Cities and townships also have procedural requirements such as building/signage permits and certificate of occupancy.  

There ways to conduct your initial research and get a head start. Requesting a copy of the Certificate of Occupancy for your potential space. The CO is typically by your municipality’s building department, it certifies that a building is in compliance with building codes and other laws, it also confirms it is in a condition suitable for occupancy. A CO also approves a new use or a change of use of a building or unit.  

Once you’ve found a space, you're heavily considering either buying or leasing, that’s the right time to bring in a trusted commercial contractor and a team of consultants, engineers, and architects. Having professional builders review prior will ensure that you limit the number of surprises further down the road.  

Below are some factors that should be considered before starting a commercial renovation and in some cases prior to signing a lease agreement.

Certificate of occupancy

The top three items on your checklist before signing a lease agreement should be: check the CO, double-check the CO, and triple-check the CO. By review the CO you can know how the property can be legally used for, residential, commercial retail store, office or restaurant. Many municipalities and townships have online databases where you can obtain a copy of a properties CO. Here is a link to search for property information in Toronto.  

Changing a certificate of occupancy/ zoning can be a costly process depending on the region or municipality. In some cases, it's impossible to change a property to another use.

One client signed a lease with the plan to opening a gym. Unfortunately, the certificate does not allow for a health club. That client is still working with her municipality to get it changed and it’s been 6 months. The best option is to lease or buy a space where the zoning already suits your business.  

Pre-existing violations

If the property you’re considering hasn’t had a new tenant for some time, it’s highly likely there are a number of building code violations. These violations range from work being done without a permit, rooftop unit being installed incorrectly, or a sprinkler system not working properly. “When you're issued a permit all of the property is open for scrutiny when inspections are completed” explained Andre, Verona Building Partner Co-founder. A stop-work order may be issued by the city if these violations aren't addressed, this can be costly to the project schedule.  

Municipalities often provide online records where you can search pending violations, see when a permit was last issued for a building and the scope of work. With a commercial lease or sale, it’s common that the landlord will take care of them but it needs to be stipulated in the lease or sale agreement.  

While your own research can uncover open violations, it's difficult to spot everything. The best course of action is to complete a pre-assessment walk-through with your architect, engineer, and commercial contractor. The team will help to determine if the space is suitable for your business needs.

Structural, Mechanical, Electrical, and Plumbing

Now you have to evaluate if your property can handle the physical needs of your business. For example, if you want to flip a clothing store into a car showroom, it’s critical to ensure that the floor can structurally support the weight of the cars. Thinking of creating an open floor plan for an office? Before the drawings are drafted, you need to know which walls are load-bearing and if they can be altered.  

Reviewing the mechanical, electrical, and plumbing (MEP) is especially if the plan is to convert a space into a food establishment that has a kitchen. Gas, plumbing, and electrical requirements will be increased, so a property’s infrastructure must be able to handle it, or extensive work may be required. This is the reason many business owners chose to lease a space that was previously operating a similar business. The likelihood the space will not require a significant upgrade to services in greater.

Checking on a building’s envelope

An envelope is the construction term for whatever separates the outside from the inside, which includes windows, doors, roofs, etc. These are important areas to look at before starting your project.  

Accessibility for persons with disabilities is often not considered. Businesses are required by the building code to make reasonable accommodations for people with disabilities. This could mean added a wheelchair accessible bathroom, widening hallways, or installing ramps.  

Another area that could affect the scope of your project is hazardous materials such as mold and asbestos. For older buildings, it is critical to have a pre-construction assessment completed by an environmental consultant or experienced commercial contractor. The assessment will determine which hazardous material is present and at what levels. The result may make or break if you decide to move forward with a lease or sale.

What are your facility requirements?

The Ontario building and health code require employers to provide reasonable access to toilet facilities. Business owners have to ensure that employees have access within the property. One client wanted to have employees go to another building to use washrooms, but codes just don’t allow for that” explained Andre.  

Like most project, commercial renovations that are well thought out and executed with the right team of professional can be exciting.  To keep your commercial renovation project on time and budget be sure to also consider the five areas outline above.

Want to learn more? Book a call with a commercial contractor specialist at Verona Building Partners.

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