Initiating Early Lease Negotiations

Initiating Early Lease Negotiations

If you are contemplating a sale of the store and you have only 2 years to go with no further option, it is imperative that you initiate negotiations with your landlord for a new lease as soon as possible. The longer you leave it the more difficult it will be to achieve the desired outcome. In the current climate landlords may not be adverse to negotiating longer lease terms.

So don’t be afraid of opening negotiations with a landlord about initiating a new lease. Rather view this as an opportunity to reset the level of occupancy cost for a number of years to come.

Special Lease Provisions That a Tenant Should be Seeking to Include When Making a Lease Offer to a Landlord:

Services:

All gas, electricity, telephone and excess water charges will be paid only if separate metering is provided to the site.

Electricity:

In the event of electricity being charged to you as a result of bulk-buying by the lessor the tariff charged will be at the same rate as purchased by the lessor or the “best tariff" rate applicable.

Lease Term:

Should the date of commencement of trading be delayed as a result of the late handover of the premises prior to fit out, then the commencement date and the termination date must be adjusted accordingly.

Market Review:

Market Reviews at any time during the lease will be conducted on a fair market basis with rentals rising or falling depending on market conditions at the time and without any preconditions for such review.

Fit out:

The landlord shall agree to make a contribution of $.......... towards fitting out of the store. This is from the point of a " clean shell " handover which includes supply of cold water, a drain, three phase power and a small residential sized natural gas supply.

The lessee will supply a normal set of plans/ drawings for approval at no cost prior to proceeding with the shop fit out.

The lease must confirm that the fittings, against which the contribution has been made, will remain the property of the landlord at the end of the lease.

Solicitor:

This offer is subject to your solicitor sighting and approving the lease and its terms

Kiosks:

The lease to provide that at no time shall any kiosk be erected within 10 meters of our lease line that could obstruct the view of our store from any angle in the vicinity of the store, nor impact on the customers going into or out of the store.

Storeroom:

In the event of a storeroom being supplied as part of the rental, you should request a licence agreement be supplied for such storeroom to run concurrently with the lease and to terminate at the same time as the lease.

Painting:

You should undertake to paint and restore the store not at fixed intervals but as and when necessary during the lease term.

HYMIE ZAWATZKY