When sourcing and securing a property for your business, the key to making it work for your organisation both now and in the future has to be negotiation. As leading commercial estate agents serving Staffordshire, Cheshire and Shropshire, we’ve helped clients with varying requirements to make the right commercial property decisions for them.
The negotiation phase of the commercial leasing process is by far the most complex, and so it should be! Negotiating the ins and outs of what you’ll pay for your lease is critical to business success. This rental rate represents one of the biggest fixed costs for businesses of all sizes and niches. As a legally binding contract between landlord and commercial tenant, a commercial lease stipulates how the property can be used along with the financial implications of doing so.
By taking the time now to negotiate a stable commercial lease agreement, you can safeguard your company from unreasonable rent hikes and fees. The money saved can then be invested back into your business to grow your company and its success during the short and long term. A well-negotiated lease agreement, supported by the commercial valuations supplied by our experienced commercial estate agency, is beneficial to both landlords and tenants, saving time and money for both parties.
If you are a commercial tenant who’s currently entering the negotiation stage of the leasing process, you’ll want to read the following top tips from our commercial estate agents.
Don’t be afraid to ask those important questions
Asking your prospective landlord for perks like rent free periods is the first thing our commercial estate agents would recommend when negotiating a commercial lease. The granting of rent free periods is more common than commercial tenants think, with the effects of the Covid-19 pandemic only exacerbating their use throughout the commercial property sector.
The landlords our commercial estate agency work with are making more incentives like these available to maintain interest in their properties as well as make life easier for recovering businesses.
Think about the longevity of your lease
The length of your commercial lease is another aspect of the agreement that is up for negotiation. Our commercial estate agents suggest referring to your business plan to discover your grounds for negotiation as well as a suitable term length.
Are you looking to expand your business in the future? Or are you just starting out? Will you have to make room for a larger workforce as your company grows? Or will remote working be the key to increasing your workforce without enhancing your overheads? By answering questions like these, you can negotiate a lease term that works for you.Â
A shorter lease term will be a better fit for businesses who need the flexibility to expand or move. Whilst a lengthy lease duration provides the security needed to cater to your large workforce for the long term.
Define your right to end your lease early
For businesses serving all sectors, nothing is certain, particularly as our economy continues to recover post-lockdown. Whether it’s the economy or your personal circumstances that impact your organisation, negotiating a break clause will serve you well if you need to end your lease earlier than the agreed term.Â
Having this additional layer of flexibility can provide the security and peace of mind you need to make every commercial decision with your, and your business’, best interests at heart.
Digging deeper into the lease’s sub-letting clause is another must for long term tenants looking to guarantee flexibility during these uncertain times.
Discover greater security for your business
If it’s the security of your business within your carefully chosen commercial property that’s weighing heavy on your mind, our commercial estate agents recommend looking closely at your lease’s security of tenure.Â
If the commercial lease agreement stipulates that you have security of tenure, you have the right to stay in the property and have first dibs on renewal once your lease term comes to an end. This is particularly crucial if you have a long lease term (of 7 years or more) and see your business flourishing there for the foreseeable future.
Keep repair and maintenance costs to a minimumÂ
Ensuring your rental rates are good value is only one of your priorities as a prospective commercial tenant. You may also be liable to settle the bill for repairs and general maintenance without a well-negotiated lease agreement.Â
A full repairing lease, in which you are responsible for conducting and paying for all repairs to the interior and exterior of the property, is what you want to avoid as a commercial tenant. Agreeing to a full repairing lease may also mean you’ll be in charge of structural repairs and rebuilding, and in the vast majority of circumstances, you’ll have to return the property in a better condition than it was leased in at the end of your term.
If a full repairing lease is your only option, calling on our commercial estate agency and our expertise delivering commercial valuations is vital. Our Chartered Surveyors will assess the property and develop a ‘schedule of condition’ to record the state of the commercial property at the beginning of your lease. A schedule of condition from our commercial valuations experts will provide evidence for negotiating a repair condition later down the line.
In an ideal world, you’ll want to avoid signing a full repairing lease and negotiate terms where you are only liable for internal maintenance, leaving your landlord in charge of general maintenance and structural work.Â
Whether it’s finding a commercial property or using commercial valuations to help you during negotiations, we can help. Contact our commercial estate agency today to find out more about our commercial property services.
