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The top 3 mistakes made by commercial tenants (and how to avoid them)


Whether you are moving into your first business tenancy or your fifth, common mistakes are often made by even the most savvy business owners. Fear not, some key actions now can save you a lot of time and money over your tenancy.

Here are three mistakes made by commercial tenants (and how to avoid them).

1. Failing to allow enough time to make fully informed decisions

This is the single biggest mistake made by tenants.

Running your business takes up all of your time, however be aware that leaving your tenancy decisions too late can end up costing you far more in additional payments.

Ever had to pay increased holdover rent?

When you run out of time, you are in a weaker position to negotiate with your landlord, who will drive a harder bargain than they otherwise would have.

Lease agreements usually have notice periods where you have between three and twelve months to notify your landlord of your intention to take up your option.

These are critical decisions for your property. This is the time to consider the current size of the tenancy, the rent level compared to the market and the amenities the current tenancy provides.

The start of the notice period is a great big clanging alarm bell to do your research and make sure this property continues to be right for your business. Know these key dates, and don’t just hit the snooze button.

2. Failing to factor in future business growth into property requirements

Lease terms can often be five years or more, but tenants usually base their property decisions on what is happening now.

This can be a big mistake. Not allowing for future growth could mean squeezing your employees, sacrificing meeting rooms, and losing productivity.

You may be forced to pay a premium for additional space nearby, or compromise your employees’ happiness out of desperation.

Consider your business growth plans and factor these into your space requirements, otherwise you may find yourself constantly moving desks to fit everyone in.

3. Failing to understand the finer points of the lease agreement

Do you know when to update the bank guarantee?

What are your ongoing maintenance provisions?

How will they affect the make-good at the end of your lease?

Many people simply look at the rent and the term and feel they know all they need to know about their lease.

But remember, your lease agreement will be anywhere from 10 to 40 pages long, full of smaller points that can have a big financial impact during, and at the end of, your lease.

Understand these things up front, negotiate the best terms to suit your business needs, and you’ll see real savings over the long term.

It may require a little extra work, but early attention to your tenancy matters can be money in the bank.

Michael Cumming is a director of Tenancy Matters, a specalised business tenant representation company which supports clients in both a one off and ongoing basis nationally.