Common Mistakes to Avoid When Seeking a Lease Extension for Your Commercial Property
Making it to the end of a commercial lease means that this chapter of your business adventure is moving on to the next. However, organising a lease extension is no simple matter. There are many things to consider when you want to extend your lease – as well as many aspects you should be wary of. Failing to effectively negotiate the terms of the lease extension can result in less favourable conditions, such as:
- Higher rent
- Limited lease options
- Overlooked rent review mechanisms, meaning that there could be higher rent increases over time
- Overlooked break clauses that may allow the landlord to terminate the lease before the end of the extended term
Read our list below to see what you can do to aid the lease extension process and allow your business to continue running the way you want it to.
Don’t Delay the Process
If you are aware that your lease is coming to an end, then you shouldn’t delay starting the extension process. By starting early you can avoid time pressures and prevent potential increases in costs. Your lease may also have timing priorities, meaning that you have to wait until before or after a certain time frame in order to begin negotiations, which leads us onto our next point…
Failing to Review the Lease Terms
When you look at your current lease, review it carefully. Take into consideration the extension terms, any notice period, as well as any specific requirements that must be met before seeking an extension. If you miss something important in your current lease this may jeopardise your ability to negotiate new terms.
If you believe that you opted out of the Landlord and Tenant Act of 1954 when you signed your current lease, and you now want to extend your lease, then reach out to us to discuss your options.
Not Conducting Up-to-date Property Condition Assessments
Although you may be happy with the layout and components of your business space, it is always worth getting an assessment of your property to make sure everything is in order. By using a surveyor and conducting a thorough assessment of the property’s condition you can identify any necessary repairs or maintenance issues and include this in your lease extension negotiations.
Not Considering the Market Conditions of Other Commercial Properties
In order to find the best lease terms, look around at other similar places on offer. Again, by using a surveyor they can assess the current market conditions and ensure that the terms of your lease extension are competitive and align with current rates for similar commercial properties. Otherwise you may be expecting too much or too little from your landlord.
Not Documenting the Extension Properly
You wouldn’t want all of your months of preparation and hard work going to waste at the last minute due to lack of documentation or improper signing. By reaching out to a solicitor, you can ensure that the lease extension agreement is accurately documented and signed by all parties.
Don’t struggle with your lease negotiations. If you are wanting to extend your lease and feel as though your business deserves more from its current contract, contact us. We are able to support you whether you are local to Sussex or elsewhere in the UK.