Tenants of commercial properties often face turbulent times around their lease expiry date. Indeed, it is common practice for landlords to propose new terms and raise the rent of their properties around this time, something that can have an impact on a company’s financial stability.
Many business owners are tempted to simply accept the conditions of a commercial lease renewal letter. If you find yourself at the end of a lease, however, you do not have to simply put up with the new amendments. Indeed, if the terms seem extortionate or fail to fit in with your business plans, you may be able to negotiate a much fairer and more manageable contract.
3 Tips On How To Negotiate A Commercial Lease Renewal
The first thing to do when you are approaching the end of your lease is to evaluate whether remaining in the building will be beneficial to your business.
Take a look at other available opportunities on the market that may be more affordable or more able to accommodate an expanding company. Generally speaking, market conditions may have changed since you signed your original lease, so it may be financially beneficial to look for other properties that come with lower taxes, competitive rent prices, favourable terms such as co-tenancy or subleasing agreements, and any amenities that may be useful for your business.
Even if you decide to stay in your current property, having this kind of information to hand will put you in good stead when it comes to any rental or lease negotiations you embark on with your current landlord.
Other steps you can take to secure a successful commercial lease renewal negotiation include:
1. Start Thinking About Your Options Well In Advance
Remember to mark your lease expiration date in your diary to allow you to consider your options well in advance. Indeed, approaching your landlord about arranging a negotiation meeting a few months before expiration will demonstrate that you are serious about your proposition and will give them time to fully consider their options.
2. Get To Know How Your Landlord Makes A Profit
Landlords naturally enjoy financial rewards when they successfully renew agreements with current taxes. In this way, therefore, they also suffer losses when a tenant leaves. Understanding exactly how much they stand to lose or gain will put you in a good position when it comes to negotiations.
3. Consider Hiring Professional Help
If you and/or your colleagues lack the legal knowledge needed to engage in negotiations with your landlord, you should consider hiring a legal professional to represent you. This is a great way to negotiate the best terms possible.