When negotiating a commercial property lease, it’s important to assess the condition of the property to ensure that you’re not taking on any unnecessary risks or costs. Having professional investigations and assessments undertake on your behalf can help you to identify any potential issues or defects, and negotiate with the landlord to address them.
In this blog post, we will provide some tips on how to successfully negotiate a commercial property lease by undertaking the necessary investigations and assessments.
1. Pre-lease Assessment
A Pre-Lease Assessment is a detailed inspection of the property that is carried out before the lease is signed. It can help you to identify any potential issues or defects that may need to be addressed before you take on the lease. A Pre-Lease Assessment will provide a thorough record of the property’s condition, identifying any defects or issues, and making recommendations for repairs or maintenance.
Depending on the findings of the Pre-Lease Assessment, it may be possible to approach the landlord to negotiate repairs, a period of reduced rent, or even a rent-free period, during which repairs or upgrades can be undertaken.
2. Schedule of Condition
A Schedule of Condition is a detailed report that documents the condition of the property at the start of the lease. Whilst not a negotiating tool per-se, having a Schedule of Condition can help to protect you from any future claims for repairs or maintenance that are not your responsibility. A Schedule of Condition should be carried out by a Chartered Surveyor, who will assess the property’s condition, identify any defects or issues, and document them in a report.
3. Planned Preventative Maintenance Programme (PPM)
Leases for commercial properties are usually for a set term of number of years; 5 year deals are common, and some are even longer. When taking on a lease for a commercial property, it’s therefore important to have an idea of the potential repairs and maintenance costs that may occur at various points throughout the duration of the lease term. A Chartered Surveyor can help you to devise a Planned Preventative Maintenance Programme that looks at the proactive management of property maintenance over a specified period of time. Having the knowledge of potential costs for building repairs and maintenance can not only give you knowledge for better management of cash-flow in the future, but can allow you to begin discussion with your landlord on sharing some of the costs. A PPM programme shows your new landlord that you are taking your responsibilities seriously as a tenant and that you are willing to look after their property. This may put you in a beneficial position when it comes to negotiating and securing the lease – especially if there are other parties interested in the property.
Negotiating a commercial property lease can be a complex process, but by undertaking the necessary investigations and assessments, you can ensure that you’re not taking on any unnecessary risks or costs. By carrying out a schedule of condition, pre-lease assessment, and devising a PPM programme, you can identify any potential issues or defects, negotiate with the landlord to address them, and ensure that you’re entering into a lease agreement that meets your needs and protects your interests.
For more information on the range of reports available on commercial properties, or to instruct one of our Chartered Surveyors, please get in touch.
