We often highlight the important of professional surveys in relation to commercial properties and specifically Pre-Lease Assessments and Schedules of Condition for prospective tenants taking up a lease on a commercial property. Such surveys go a long way to providing detailed information relating to a property’s current condition, highlighting any defects along with recommendations for repairs, likely future maintenance and, if necessary, further investigation that may be needed. Pre-Lease Assessments and Schedules of Condition enable tenants to understand the building better, along with any liabilities they may be taking on.
Pre-Lease assessments of commercial properties may also open the door to negotiating with the landlord. In many cases, where negotiations are successful, the fees paid for the survey are more than recouped in the savings made on repairs, or reductions in rent.
Some of the routes of negotiation are as follows:
• Request that elements of repair and maintenance be specifically excluded from your lease obligations.
This may be where certain elements of a building’s structure are found to be in need of repair or highlighted as requiring repair or replacement during the lease term.
• Request that certain repairs be undertaken by the landlord before the lease is agreed.
This is a fairly common request in relation to relatively small repairs. Any repairs should of course be completed to a good standard and ideally, a timeframe for completion should be agreed.
• Accept liability for works, but request a rent-free period to offset the costs that may be involved.
Depending on your timescales, this may prove an advantageous route as it will allow you to take occupancy sooner. If you are planning on undertaking wider renovations or alterations, this may again be a good choice, as you can do so without the overhead of property rent. There is of course a risk that the cost of repairs or the timescales involved escalate beyond your expectations, which could delay your commercial activity.
There is no guarantee that a landlord will be willing to negotiate in any of the above listed ways. If a property had a number of interested parties, it may be that the vendor will simply look to the next potential tenant in line. However, in the majority of cases, landlords will be willing to consider at least one option of negotiation in order to avoid delays in getting a tenant in or having to re-market the property. It may be that you present the various scenarios on which you would be happy to proceed and allow the landlord to choose an option.
Although commercial leases place a large burden for maintenance and repair upon tenants, having a property in a good condition is also in the interests of the property owner. When armed with evidence in the form of a Chartered Surveyor’s report, negotiation is worth a try and can often be successful.
For more information or to obtain a quote for a Pre-Lease Assessment or Schedule of Condition, or discuss any of our commercial property services, please get in touch.