Negotiating Signage Terms for Your Next Commercial Lease
December 13, 2013
Although it might seem like a relatively minor component of any leasing agreement, signage rights and responsibilities can sometimes make or break a deal. A recent Connecticut Post article highlighted the issue of signage in Stamford, Conn., particularly in office buildings along the Interstate 95 corridor. With New Jersey similarly offering many high-visibility properties along the state’s many highways, and with so much on the line in terms of business success or failure, signage should be meticulously covered during the lease negotiation process for properties in this state.
Signage terms sometimes hold the key to an agreement because of their importance to each side. A landlord is deeply committed to ensuring that the signage it approves is uniform and maintains a certain design aesthetic that provides the appearance to the public of an attractive and desirable shopping destination, which drives sales and increases demand (and rental rates). Tenants, similarly, are invested in ensuring that their signage makes their store easily locatable, easily recognizable and consistent with their branding scheme.
One important element of signage is government approval. Many lease agreements place the responsibility for acquiring government approval of a tenant’s sign with the tenant. Often, the landlord has already secured government approval generally in terms of location and size, but the tenant must still obtain approval for its specific sign. As a tenant, you should investigate negotiating a lease term that obligates the landlord to cooperate in the approval process, such as aiding in the filling out of applications or attending meetings. You should also decide who will handle this process on behalf of your business, whether it is your broker, your attorney or a member of your staff.
Additionally, if you will not have your permanent signage up immediately, you should negotiate with your landlord regarding temporary signage. This may be essential if construction, or the government approval process, is still ongoing, and your permanent sign will not go up for a period of time.
Another element you may consider, as a tenant, is a limitation restricting your landlord from offering greater signage rights to other tenants. Such a provision might state that you may only place a sign on the exterior of the premises next to the entry to your space, and similarly restrict your landlord from giving any other tenant any signage rights other than on the exterior of the premises next to that tenant’s entry area.
Finally, if your space is within a property that has a directory, you should negotiate to ensure your business’s listing, under its trade name, in all of the property’s directories. This is particularly relevant for retail tenants situated in malls and shopping centers.
Negotiating the terms of signage is just one of many examples of the detailed intricacies that go into successfully negotiating a commercial lease. To make certain you are adequately represented as you proceed on securing your next lease, or newest tenant, consult the real estate attorneys at Samuel C. Berger, P.C. Our New Jersey real estate attorneys have the experience, knowledge and attention to detail to ensure you secure an agreement that benefits your business. Reach us online or call (201) 587-1500 or (212) 380-8117.
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