Since commercial lease agreements are prepared by the landlord, (and usually designed to favour the landlord), as a tenant, the odds are often stacked against you. For this reason, it is common-place for tenants to negotiate the terms of their lease to secure a better deal. It is important to seek advice before the offer to lease is signed, to ensure there are no unexpected traps that may not be able to be re-negotiated when the formal lease is prepared.
So, whether you are considering leasing a commercial property or are renewing an existing lease, it is a good idea for you to understand your leasing options and (re-)negotiate the terms on your lease. Here are some simple steps you can follow.
Analyse the market
It’s important to remember that negotiating may not be possible in every circumstance. If the market is reflecting a high demand, landlords will most likely be less open to negotiation and visa versa.
Research alternatives
Even if you intend to stay in your current space, take the initiative to educate yourself on other buildings and owners in the market. You may uncover an alternative solution that is competitive and worth exploring. You may choose to move locations, or bring these differentiating factors to the table during the negotiation process, creating incentives for your landlord to make you a better offer. Remember – at the end of your lease there are usually make-good requirements that can be costly, so part of your considerations should include those costs and new fit-out costs.
Get an inspection
Always carry out a property inspection before signing a lease contract. This can be as simple as a walk through to see the property for yourself, or bringing in a commercial property inspector.
It’s important to prioritise this step and complete the same before any offer to lease is signed.
Liaise with a Property Lawyer
Commercial premises have different obligations than residential, as well as additional (and varied) contract clauses.
A commercial contract will also usually include costs that the tenant pays (these may not be just for the lease, but also the landlord’s additional costs when changes are requested), so you need to understand your obligations before signing any contract (including the offer to lease).
A good property lawyer may cost some money upfront, but they will help you understand the contract and raise any red flags, saving you money in the long run.
At D’Angelo legal we have a team that specialises in Property Law and can assist you with understanding your commercial lease. Start the Conversation by contacting us on our website or calling (08) 9381 1147.