When continuing occupation of a commercial premises is no longer viable, you will be required to negotiate the surrender of your lease with your landlord and agree on an exit strategy. There are certain things expected of you before an exit can take place. This can include break clauses, early termination options and dilapidations.
If you intend to move from your current workplace, you will need to settle your dilapidations bill. Dilapidations refer to the repairs required to return a property to the condition it was in at the start of the lease. This can be a timely and costly process and could even impact your moving plans. Our Building Consultancy team can review your dilapidations bill to ensure the costs are fair by checking them against your lease obligations and providing an independent quote for the work required. We can also help you understand and value the full implications of the dilapidation clauses in your new lease to ensure they are equitable.
When a commercial lease nears the end of its term, the renewal process will be initiated by either the landlord or the tenant, by way of a Section 25 Notice (for landlords) or a Section 26 Notice (for tenants). Once initiated, both parties will have to review the current agreement to ensure that there is a viable justification for any amendments to the terms and conditions, including rental payments and break clauses.
We have a proven reputation for advising clients during the negotiation period, to help them achieve the best terms before signing a new agreement. This includes reviewing any changes proposed by the landlord to ensure they are reasonable and equitable in the current market.
Most lease contracts will include a clause which allows a rent review to take place after a pre-determined period. Reviewing the current rental charges and adjusting it accordingly, allows landlords to benefit from the uplift in market value experienced by the property and its surrounding area. However, tenants could use a rent review to their advantage by using the regular break clauses to negotiate more favourable lease terms.
Our Lease Advisory consultants will work with you to ensure rent reviews are well managed to ensure that:
- Landlords can optimise their property’s profitability
- Tenants do not miss ‘lease event’ dates, resulting in the increased liability of rent being backdated to the rent review date
A poorly executed rent review can be expensive and both parties might fail to reach a mutually agreeable resolution. At worst, it could lead to the dissolution of a commercial contract therefore, it is critical you seek professional advice when navigating this process to ensure an amicable resolution.
If an agreement cannot be reached, a third-party independent expert is usually called in to arbitrate.
