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Top tips for renegotiating your office lease

When your current office lease expires you're bound to be left with a tricky decision - find a new suitable office property in your area or stay where you are and renew your office lease. If you decide you're best off in your current premises then you'll need some expert advice to help you to renegotiate the best terms for your office lease.

Over the years we've picked up a plethora of tricks and tips from our property solicitors members which are sure to help you when it comes to negotiating and formalising the complexities within your commercial lease.

      1. Research the market:
If you go to your current commercial property landlord with a list of alternative offices and rental options you're far more likely to negotiate a better deal. If you go to your landlord prepared she/he can see you're serious about possibly relocating so will work harder to keep you as an office tenant.

      2. Break clauses:
Work hard to try to agree reasonable break clauses with your landlord. A tenant right to break can be crucial after a rent review and is an easier, simpler way out of a lease than underletting or assigning. Courts still impose strict punishments on tenants who breach break conditions so it's important to check the terms and conditions of your break clause before signing your commercial property lease.

      3. Rent options:
Ideally you want to arrange monthly rent payments with your landlord because it will be much easier for the cash flow of your business. Landlords should be amenable to this suggestion, especially if you agree to pay by electronic methods. When it comes to rent reviews many landlords still favour the upwards only review, however some are open to upwards/downwards review to open market rent so it's always worth asking. If your landlord won't agree to that, consider options such as increases linked to a specific index, turnover based increases and fixed increases.

      4. Repairs:
Repairs and reinstatement can be one of the trickiest issues when it comes to lease renegotiation so you need to be extremely careful to read the small print before you sign your commercial property lease. Your repair obligations will always depend on the length of your tenancy agreement and the condition of the premises in question at the start of the lease. Most landlords ask that you leave the property in the condition in which you found it (this should be documented by way of a schedule of condition), however some may be more particular about their terms so you need to take the time to read the exact repair wording in the contract.

      5: Service charge:
You may be familiar with the service charge you are currently paying on your office space, however you need to check that no new expensive work is scheduled in which could bump up the price of your service charge. Your service charge may be calculated as a percentage of the total building expenditure. While this is simple and easy to understand, it might mean that you have to pay for things that don't benefit you or your business e.g. a lift in another building. Alternatively service charge can be calculated using other methods including floor space and rateable value calculations. However your service charge is calculated, it's wise to identify items that you won't contribute towards and agree that the landlord includes these exceptions in your lease contract.

As you can see, there are a lot of aspects that need to be considered when renegotiating your office lease and while these tips provide a good starting point, we always advise contacting a professional property solicitor to help you with the whole process. Find the best property solicitor in your area today by searching by the area you are moving office to, or alternatively search the Help Moving Office site for useful moving office checklists and key resources - these will prove to be essential should you fail to reach an agreement with your current office landlord.

 

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