Commercial Office Leases - what Tenants need to be aware of
Negotiating a Favourable Office Lease
Whether you are a tenant re-negotiating your office lease terms, or you are moving to a new office and negotiating lease terms on a new office lease, it is vital that the documentation is correctly drafted to accurately reflect the deal agreed between the parties (landlord and tenant), and to protect your interests throughout the term of the office lease.
A well drafted office lease is beneficial to both parties and can help to avoid disputes further down the line. A poorly negotiated office lease can make the difference between success and failure for a business.
Here are some points to consider to make sure that your Commercial Office Lease is fairly negotiated and accurately drafted:
Take Professional Advice
Make sure you take legal advice in the early stages of your office lease negotiations, as it can be difficult to re-negotiate heads of terms once they are agreed. Whilst a Property Agent will carry out your initial negotiations, a Property Solicitor to advise on the legal aspects of your office lease.
Flexibility
Is the office lease flexible enough to meet the changing demands of your business? Is there a break clause provision, for example, to allow you to exit the lease prior to its expiry? Are you allowed to sub-let the property in part or whole in the event of uncertain financial circumstances?
Repairing Obligations
Make sure you are clear as to who is responsible for repairing the property. The majority of office leases are drafted on fully repairing terms and a tenant will need to be fully advised as to the responsibility and cost implications of this.
Rent Review
At what point will the rent be reviewed? Will it go up or down? The tenant needs to be made aware of the implications of a rent review as the rent could significantly increase at some point in the contract.
Other Tenant Costs
There are other costs that need to be factored into a tenant's office move budget, including service charge provisions and business rates. The tenant needs to be aware of what these costs are likely to be before committing themselves to the property. If you are considering moving office or taking on a new office lease then make sure you speak to a Property Solicitor to ensure you get the best possible advice your business deserves.
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