A guest blog by Louise McElarney, Director, Lease Advisory, Avison Young...
It’s so simple. As a tenant you have rights. Know these rights and exercise them or it could cost you dearly.
At Avison Young we advise on both sides of the coin – for landlords and for tenants - and will always seek the best deal possible for our client in each case.
The Lease Advisory team at Avison Young, which operates nationally, recently acted for a landlord client on a lease renewal in the Midlands. As the tenant failed to serve a formal notice - in order to protect their right to a new lease when the original lease expired - the landlord was able to secure a new tenancy agreement which will pocket them an extra £250,000 over the length of the lease. Of course, this means the tenant in question is now out of pocket to that tune.
The tenant lost its negotiating position through not exercising its right to a new lease. If they no longer wanted to occupy the premises that would have been absolutely fine. However, they were ‘over a barrel’ so to speak. It was crucial for them to stay put. A furnishing company using a large warehouse, they did not want to leave. Therefore, when the landlord raised the rent, they had no choice but to accept the terms. If they had planned early, exercised their right to a new lease, seeking professional advice, they could have negotiated a better deal.
Office/property costs are still the largest outlay for businesses after staff costs. Taking on or dismissing a staff member is a decision not taken lightly and this should always be the case for your property requirements. It is advisable to diarise important dates in a lease contract and seek guidance early from a professional to advise on the rights of both the landlord and tenant to avoid sticky situations, ultimately, improve your business’ bottom line.