Hi There all,
I recently had one of my PM email me to tell me that one of four offices we have in the one building was up for renewal.
Now these offices are small… they each receive approx $390pcm rent. The tenant that is up for renewal is an existing tenant, so there is no advertising cost involved or anything like that.
So to my knowedge its just a matter of drawing up new leases. She has told me it would cost $550.00, and the bitter thing is that its only gonna be a twelve month term, whereas they have just come off a three year term.OK, after all that my question is, Is it worth me chasing a solicitor to draw up the new lease, or even doing them myself????
John[biggrin][biggrin][biggrin]
John,
Writing a commercial lease is not rocket science. It’s highly over-rated actually, although the experts will definitely say that it is very unwise to reduce their revenues and far better to give them the job.
In terms of length of lease vs cost, a water tight lease takes the same amount of time and mental effort to write up a 6 month lease with no option, as it does to write up a 10 year lease with a 10 year option.
If you are down to 12 month terms, that’s getting down into the fickle residential territory. I’d be looking for way more commitment from the Lessee than that. If they won’t yield to a longer term, look for better Lessee’s.
Dazzling, wouldn’t (or shouldn’t) it be simple to renew a commercial lease?
If you and the tenant are happy to continue the lease, then you simply take your copy of the old lease, change the dates and rent as applicable, and type it up.
Maybe I am missing something, but if you have already have a lease (that’s been drawn up previously and simply about to expire), then you just cut-and-paste.
As a previous commercial tennant we previously got stuck with the lease costs, it was very common in Sydney circa late 80’s and back then it was double what you are talking about.
Yes it should be easy, especially if the Lessee plays the game and wants to extend.
Our last purchase inherited a tenant on a 3x2x1 lease, with only 6 months to go with the final option. We simply typed it up on a one page piece of paper stating the new nett rent to be paid, new lease term and option (4×2 woohoo !!), new escalation rate p.a. of the nett rent and emphasised they were responsible for all property costs (CR / WR / LT / Ins / all consumables).
Both parties signed off and happy days for the next 6 years….sorted.
Naughtyjonny…no you’re not missing something…it’s pretty stock standard stuff.
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