Dec 9 Tenant Tips – Renewing a Lease
Posted at 01:14h in Uncategorized
Critical “Must Understand” Lease Renewal Issues!
- You must have serious relocation options if you plan to tell the landlord you will relocate if they don’t agree to your terms. Be prepared to relocate or accept the landlord’s terms if the landlord calls your bluff.
- Just because you have a renewal option does not mean you have to exercise it. Exercising the option gives you control of the space but not necessarily negotiating leverage. There are a lot of “what ifs” and “it depends” for us to make a specific recommendation here.
- Don’t let the landlord automatically set your base year for the first 12 months of the new lease term. You could end up paying significantly higher pass-throughs (operating expenses) for YEARS if you don’t research historical operating expenses, identify deferred maintenance, etc.
Negotiating a Lease Without a Broker?
- Landlords will take advantage of a “defenseless” tenant.
- A landlord’s offer to lower your rate in exchange for not hiring a broker is the biggest myth. I say with 100% confidence you will negotiate less free rent and less money to renovate your space. And you will pay an above-market rental rate. DON’T open your wallet so the landlord!
- Business owners overestimate their own negotiating skills for a myriad of reasons against professionals armed with an abundance of market insight and knowledge.
- The amount of rent overpaid over 3 to 5 years can be in the thousands! The amount of free rent and less money to renovate the space can also run into the thousands!