Tips for negotiating your commercial lease by Cathie Sellars, Head of Marketing, workspace.co.uk on 16-Oct-2013

It may sound counterintuitive that a buyer’s market is also a renter’s market, but in the case of commercial real estate it’s true. Thousands of businesses have downsized or closed in the past five years, leaving commercial rental properties unoccupied and landlords offering bargain rates to fill them. Just because you’ve found a great property and what seems like a good rate doesn’t mean you should sign the dotted line just yet, though. Chances are you can get a better deal if you bring the following requirements to the negotiation table according to Cathie Sellars, Head of Marketing at workspace.co.uk.

1: Commercial rental maintenance and repair

Most people think that commercial rentals such as the ones provided by Workspace, are like residential leases in that maintenance and repair is the responsibility of the landlord. However, many landlords require the renter to take responsibility for maintenance and repair. Just imagine a clogged sewage system on a Wednesday morning, faulty air conditioning on a sweltering July day or a leaky ceiling during an important meeting - the impetus could be on you to fix it! Read through your lease carefully and ask for clarification about your responsibilities when it comes to property upkeep.

2: Added fees

A rental rate may seem too good to be true, so always check if there will be any added fees tacked on to your monthly bill. Oftentimes, commercial landlords will add fees for shared common areas such as toilets and lobbies and may ask that you pay an administration fee for services such as dividing utilities amongst tenants. Ask for clarification of all fees before signing the lease so there are no surprises when you receive your first bill.

3: Extra contract clauses

Whether it’s a six-month or two year lease, things can change, and quickly. It’s worth investigating whether you can add on a few clauses to protect your business' long-term interests. The following are key to any flexible contract:

1. Sublease: if your business plans change, a sublease will allow you to rent the space to another business;
2. Co-tenancy: if you’re signing a lease in a certain complex because of an anchor tenant, consider what could happen if they move. Add a clause that would allow you to break the lease if the landlord doesn’t replace the anchor tenant in a reasonable period of time, usually two months.

4: The Landlord and Tenant Act of 1954

If your lease is within the terms of the act, you have the right to apply to the Court for a new lease at the end of your tenancy unless your landlord objects on certain specified grounds.

5: Ask for it!

There are so many properties on the market that landlords and agents want to make theirs the one you choose. If the space is great but lacking a little something such as an espresso machine, new carpets or a free month if you sign a longer-term lease, ask for it. You may just get a great deal.

Cathie Sellars is Head of Marketing at: workspace.co.uk

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