Your lease should be likened to your local Member of Parliament. No sooner have they won the election for a further term, they are out there campaigning for the next term.
So when viewing the relationship with your Landlord don’t think of the lease in respect of space or square metreage but in the concept of the diminishing resource called time. Unlike your local member, most Retailers/Leasees take for granted they will have their lease renewed when time runs out.
Although this is a floored approach as your lease is also like a “Marriage Certificate” that already has the divorce packaged in. And this divorce can be even more costly and devastating than the real thing!
It doesn’t matter how much information and guidance the industry and government provides to Retailers there is a serious issue with Leasees not leveraging time when it comes to major lease events such as lease expiry or options.
With lease expiries – the divorce, you need to be well and truly across the time-line, the outcome you seek, the research and to have a strategy (including alternatives) no later than 18 months before the expiry date. Anything past this time barrier and you are allowing the Landlord to leverage the outcome.
Similarly with lease options and notably in QLD & NSW (and soon we hope in VIC) you can apply to the Landlord to have the market rent determined early. This means the rental is either agreed to between the parties or determined via the processes under the relevant Act before you have to exercise your option, and possibly be trapped in a lease you can’t afford.
Regardless if you have a 3, 5, or 10 year lease – take it out of the bottom draw today and mark back 2 years before the lease expires (or your option) and declare that day as the start of your campaign for a further term.
In leasing, time can either be your best friend or your worst enemy, it’s up to you.
Lease1 is the leader in its specialist field and is committed to providing personal, timely and cost-effective services to save tenants time, money and stress in their lease negotiations. Visit www.lease1.com.au