A guide for occupiers
Lease Commencement/Rent Free
- Sign occupational lease
- Agree License to Alter
- Take occupation
- Plan regular maintenance to minimise lease end expenditure
- Review your lease for maintenance and repair obligations, to ensure compliance
- Complete interim repairs
Continue Lease or Exercise Break
- Consider whether you will stay or exercise the lease break
- Seek advice from a Building Consultancy specialist on possible lease break options to maximise your position
- Business decision regarding the lease break is required now
- Seek professional advice to ensure the conditions of the break are complied with
- e.g. a defined notice period of 6 or 12 months
- If exercising a break, a detailed analysis of the break clause is required to limit your liability with the landlord
- The break may be conditional and include a financial penalty or repair obligations
Planning/Decision Making
- Commence exit planning
- Consider a dilapidations liabilities assessment to help budgeting ahead of year end and IFRS16 compliance. Allocate budget to balance sheet.
- Review end of lease obligations
- Open early dialogue with landlord around options:
- Lease renewal
- Relocation
- If lease renewal: this cycle starts again at “Lease Commencement/Rent Free”
- If relocation: receive and review landlord’s Schedule of Dilapidations and Quantified Demand and develop exit strategy
Exit/Renewal
- Consider defence strategy and negotiate position with landlord – talk to a Building Consultancy specialist
- Undertake works or negotiate a financial settlement
- Yield up and hand back
- Agree lease
- Complete due diligence on new premises and new lease terms, to ensure future liability is limited
- Create business space suitable for occupation which reflects your firm’s culture and working practices
- Carry out fit-out works (Cat A/Cat B)
forward planning will save you money
