Guide to Renegotiating your Business Lease

KEY INSIGHTS

• To ensure a strong negotiating position you need to first gain an insight into the local market and current commercial leasing rates for comparable premises
• Then take a good look at your current lease agreement and identify terms and conditions you’d like to change
• Be prepared to explain your position clearly and concisely and show you’re willing to negotiate in good faith
• Focus on the most important points, negotiate as necessary and be sure any agreements or concessions made are spelled out in writing
  
  

Renegotiating the business lease for your foodservice premises so as to achieve a favourable outcome can be a challenging process. In order to put yourself in the best possible position to succeed, keep the following points in mind:

·       Identify your goals and priorities at the outset and have a clear idea in mind of what you hope to achieve.

·       Start by doing your research: to ensure a strong negotiating position you need first to gain an insight into the local market and the current commercial leasing rates for comparable premises in the area. This will help you to identify whether you’re paying a fair rate and if there’s room for negotiation. A search of the various listings for commercial premises of similar size/position will give you an overview.

·       Once you have an understanding of the local market, take a good look at your current lease agreement. Identify any terms and conditions which are overly restrictive, are having a negative impact on your business, or which you’d simply like to change. You need to be prepared to explain why you want these changes and how they will benefit both you and the landlord.

·       When you approach the landlord or their commercial agent, explain your position clearly and concisely and that you’re willing to negotiate in good faith. Remember the landlord will have their own business goals and concerns, and the best outcome for both parties is when each side feels they have achieved their objectives.

·       Focus on the most important points, which are likely to include the length of the lease, the rental rate and frequency of past price increases, plus any costs for which you are responsible as opposed to the landlord. Be prepared to discuss each of these in detail and to negotiate for terms more favourable to your business as necessary.

·       Make sure any agreements or concessions made during the negotiation process are spelled out in writing and preferably initialled by the landlord/their agent at the time. You should also ensure that everyone understands the new terms of the lease and have copies of the new lease agreement signed by all parties as soon as possible. And of course, be sure to read all final drafts of the documentation carefully to satisfy yourself than everything is as agreed upon prior to signing.

YOU MAY ALSO LIKE