These are the Terms You Should be Negotiating in Your Commercial Lease

Documented official agreements are there for two major reasons. The first is to record the accurate terms for reference, and second to protect against the breach of agreement by either party. However, usually once the dotted line is signed, these papers are shoved in the back of an old drawer and never seen again.

Documented official agreements are there for two major reasons. The first is to record the accurate terms for reference, and second to protect against the breach of agreement by either party. However, usually once the dotted line is signed, these papers are shoved in the back of an old drawer and never seen again.

Business Property Lease never falls in this category. Both the tenants and landlords consult documents regarding obligations and rights, particularly in accordance with use of property, maintenance, and repair of space.

The Power in Negotiation

The power in negotiation depends a lot on the economic cycle. The landlord or the tenant may have the upper hand, especially when times are booming and everyone wants to get themselves new premises. A landlord will be less likely to accept any substantial changes that you would like to make to the draft.

Things You Should be Looking into for Negotiation

Landlord and Solicitor Costs

More often, when it comes to commercial property, the land lords are professionals. They have dealt with this a hundred times already. Because they have more experience and knowledge, they stand a better chance of dictating terms with little margin for a tenant to make amendments. One of these terms is the Solicitor’s bills of the landlord. The only way to get out of this is to make it clear from the beginning, that the only way you will buy a property is if those specific costs were exempted.

How Much Property is Yours

You need to make it clear how much space on the property is allotted to you. Landlords will avoid problems in the future and all arguments, if you have them give you the conveyance plan which has the extent of space on property clearly explained. This includes storage, parking access, and even pipes and drains.

The Duration of the Lease

You want to discuss the very important terms of lease. It may be subject to rent review, but the longer the term will be, the greater will be the value of it to the landlord. If a landlord wishes to borrow money against security of the lease, any financial institution will be less likely to consider any proposal when it comes to lease of less than 5 years. Tenants need to get a long lease for justifying high fixed costs, and machinery installation.

The Rent

This is the most important thing you will discuss. The rent is calculated generally per square of the property. The landlord will usually give you the flexibility of a round up price of what he or she advertised. Negotiating will become easier for you if you are given an accurate scale plan for reference. You may want to split the floor plan and reduce the rent.