June Edition: Commercial Outgoings, Leasing Checklist & How To Avoid Make Good Disputes
Welcome to the latest edition of Tenant CS's Monthly Roundup, where we share company news, articles you may have missed and helpful tips for commercial tenants.
Let’s get started!
Commercial outgoings are the expenses associated with operating and maintaining a commercial property.?And to say they're one of the most overlooked and least understood areas of commercial leasing is not an understatement.
Poor decisions can hurt your company in the long run if your commercial lease terms are not flexible enough or you do not negotiate what you need.
In fact, even one paragraph of ambiguous language in a commercial leasing agreement can spark years of stress and even lead to litigation.
If you're in the market for commercial space, run through our commercial leasing checklist to ensure you've done your due diligence before you sign on the dotted line.
Commercial makegoods almost always cause tension or angst. Here are six reasons why:
?? The lease wasn't negotiated properly in the first place - Make goods can be overlooked during negotiations because immediate costs (like commercial terms) take priority. That means tenants don't always understand the extent of their obligations until the end of their leasing agreement.
?? Vague or ambiguous wording - When this happens, clause interpretation can go different ways (usually in favour of the landlord), leading to expensive and lengthy landlord-tenant disputes.
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?? Make goods aren't always considered during the design phase - It's easy to get caught up in designing a trendy new office. Sometimes it's so exciting that tenants forget obligations around returning the space to how it was before they moved in.
?? Budget issues - Understandably, the expense of making good can come as quite a shock, especially if it's not factored in beforehand. Office tenants should expect to pay $400-$600 per sqm in Sydney, for example.
?? A tenant's belief in the value of their fitout - This is probably the most common cause of angst. Unless a landlord already has a replacement tenant who says they want your fit-out, it's difficult to argue that it will suit the next occupant.
?? You're essentially breaking up with your landlord - It doesn't matter how good your prior relationship was; your ex will be bitter. It's always best to engage a divorce lawyer, in this instance, a tenant rep.
Lucas recently joined the Melbourne team as a Portfolio Lease Coordinator and will work closely with?Jeremy Dukes?to help manage?nbn? Australia's national Telecommunication Tower Lease Portfolio.
Known for his friendly and approachable nature, Lucas is a lifelong Collingwood supporter and a coffee connoisseur who loves staying active and healthy.
Got an upcoming real estate project? Let us help
2023 is the year for tenants, and great deals will be there for the taking. Despite this, many businesses still get caught up in poor lease deals because they’re kept in the dark about their options, lack expertise and have no one advocating on their behalf.
At Tenant CS, we ensure tenants get the best deal possible and, on average, we improve tenant savings by 180% compared to tenants who attempt negotiations themselves.
Get in touch with our team to learn how to take advantage of the current market conditions: