5 Tips for Negotiating a Commercial Lease

The commercial property market is highly competitive in Australia, leases have become shorter, increasingly flexible and generally more favourable towards the needs of commercial tenants. However, before you secure your commercial premises, it is important that you negotiate your commercial property lease.

Here are some tips to get you started.

  • Evaluate your business needs

Do a little research before negotiating. List down your company’s current and future space needs, determine your budget and the preferred location. Then negotiate a lease that covers everything you need. If you are uncertain about near-term needs, consider a shorter lease.

  • Always involve a lawyer

It is important to involve a commercial conveyancing lawyer Melbourne in your lease negotiation. Conveyancing lawyer will read out the terms of the lease and help in negotiation.  Some businesses do not involve conveyancing lawyers or use family lawyers and end up signing a lease with unexpected costs. Leases are complex, so it would be good to hire an expert.

  • Understand the lease options

There are different types of commercial leases and a number of abbreviations that differ in meaning and usage and the cost. Single net lease, double net lease, triple net lease and full service or modified gross rent lease. Full service or modified gross lease is the most common type of lease for multi-tenant buildings. With these, the rent does not increase if operating expenses do, but on the flip side, rent does not decrease either if operating expenses drop in a year.

  • Understand the costs involved

Carefully review the incidentals you are being asked to pay to ensure that the total cost fits your budget. Any future increase in base rent and incidentals should also be clearly specified. Do not shy away from asking for charges.

  • Look at renewal conditions

The duration of the commercial property lease can range from some months to several years. Make sure you understand when and how the lease will be renewed and also ensure that you have the option to renew the lease at the end of the term.

These are few tips to negotiate you lease. If you are having a hard time in negotating a deal, get in touch with P&B Law. They have qualified conveyancing lawyers to ensure that you process is carried out smoothly.

VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)