If your commercial lease is up for renewal, now is the time to renegotiate the terms and conditions.
The draft lease will likely be prepared by your landlord’s solicitor, and so will almost certainly favour your landlord. However, you can always push back to get yourself a better deal. You are perfectly entitled to do this.
That is not to say that every request will succeed. Usually, your bargaining power depends on the state of the market. If the market is slow, you could find that you are able to secure better terms than five, 10 or 25 years ago.
Here are some conditions you may want to focus on.
Your preferred lease length will depend on you and your business. If you are a new company, a long lease might be overwhelming. What if sales are slow and you cannot afford the property in two years? If so, you do not want to be tied to a long-term commitment. Yet if you are an established business, a long lease may be important to you. Decide what fits your business needs and request a lease terms that suits.
Security of tenure
Security of tenure means that your lease automatically renews at the end of the term, should you want it to. A landlord can only refuse your request to renew a lease on certain grounds – for example, to redevelop the property. Having security of tenure included in your commercial lease makes it difficult for your landlord to evict you, providing you with greater protection.
Even so, you may want to vacate the premises before the lease has expired. This might happen if your business expands, or your business does not do as well as anticipated. Either way, ask that break clauses be included in the commercial lease. These allow you to terminate the lease early. Sometimes landlord’s attach onerous conditions to break clauses, limiting their effectiveness for tenants. Be wary of these tactics.
Everything is up for negotiation, including how much rent you pay. If you do not have a fair deal, say something. You could also request a rent-free period in return for staying in the commercial property, or for carrying out repairs. Landlords are often keen to work rent reviews into the lease, but you can request a maximum rent cap. That way, you can plan accordingly.
Repairs and alterations
Commercial tenants are often liable for repairs. Also, they usually need permission to make alterations to the property, even if they are minor. Both these terms can make life difficult for you. Negotiate a clause that says you will return the property in no worse condition than when it was acquired. This can help you avoid an expensive repair bill. For ease, also get permission to carry out minor alterations without the landlord’s consent.
Help renegotiating a commercial lease
If you want help renegotiating your commercial lease, please contact us at Breens Solicitors. We can act on your behalf, securing a deal that works in your best interests.