How to negotiate a commercial lease agreement with new tenants? As a landlord, you would need as much information on a prospective new tenant as possible. This would typically include background financial information. Also, previous profit and loss accounts, Credit reports, List of assets and liabilities and possibly a Business plan. In addition, you may need to speak to previous landlords. This would give you some background of what you can expect from them.
It is a good idea to talk to more than the current landlord. This would give you an idea if the prospective new tenant has had a bad experience with them. As well, the current landlord may be sick and tired of them and therefore happy to pass on to a new landlord. Talking to one or two of the previous landlords would give you a better idea of their history. Have they been paying their rent and operating costs on time? In addition, what length of the lease did they have? Therefore, reducing the possibility of any surprises.
This would give you the insights required in considering any rent-free periods, what year lease term, whether to provide them with a long term lease, annual rent increase, operating expenses and any options to renew. Also, If there were an existing lease in place and had a request to transfer the lease, you would need to do the same checks on the prospective new tenant.
The terms of the commercial or retail lease agreement.
So before a new tenant signs a new lease it may be wise to talk to some of the landlords’ other tenants as well. This can be easy to do if you’re moving into a multi-tenant building as a new tenant. It might be a good idea to walk around to some of the other units. Talk to some of the tenants. Are they happy with how the landlord is treating them? Is the landlord doing a good job or maintaining the property. In addition, are they responding to there request whenever something needs to be repaired or sorted? Have a quick walk around as much of the common area as possible.
Many new prospective tenants know that some landlords love the idea of collecting regular rent from their property every month. On the other hand, they’re not very excited about maintaining the property to the tenants’ expectations.
In conclusion, whether you’re a tenant or landlord, you would need to cover these steps. Most importantly, to make sure that the next person that you’ll be signing a new commercial property lease is indeed someone you want to be in a business relationship with.
Most importantly, ensure you do your homework and talk to people who have already had a large or small business relationship with them. Everything may look great in the initial presentations to you, but in reality, the real truth is what others have to say about their individual experiences in working with them.
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