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A Guide to Lease Negotiation

If you are a small business planning an office move, you may find yourself responsible for negotiating a new office lease. This may seem like a daunting task, but with the right guidance you should be able to come to an agreement that provides the right benefits for both parties.

Lease negotiation will usually take place between the tenant's property agent and the Landlord's agent. However, it is important that you spend time researching some of the incentives that may be available to you as a tenant, and ensure you are clear about your leasing requirements before negotiations begin.

To make sure that your lease negotiation runs smoothly, follow some simple tips below:

Negotiate a rent-free period
This is especially important if you are a new business. Not only is it highly likely you will get it in the current market, it will also improve your moving office costs for a few months. Negotiate to pay your new office rent on a monthly basis rather than a quarterly basis to also improve your cash flow.

Request a break clause
A break clause offers you the right to end a lease early and gives you far more flexibility. It is a much easier way to get out of a lease if necessary rather than trying to sell it on or subletting. If the landlord agrees to a break clause, spend time considering when your next office move might occur so you can make sure the timing suits your future needs.

Request a schedule of condition
If the business office space you are moving to is in a less than perfect condition, it is well worth requesting a schedule of condition. A schedule of condition will detail any items of disrepair which already exist at the start of the lease so that you are not liable to foot the bill for any of these repairs at any time during your lease.

Cap service charges
If you are required to pay a service charge towards the upkeep of your newly leased office space, request that the charge is capped by the landlord to ensure that you do not end up having to contribute towards the cost of building renovations such as a new roof or windows.

For further information and guidance on how to perform the perfect office move, download our Office Relocation Checklist.

 

Planning an office move? Go the office relocation planning resource centre

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