Do you want to rent a space in a shopping center, but the lease you received from the landlord reminds you of Faust’s pact? Do you feel like you are only taking on obligations and have no rights in the contract? Below are 10 ideas and negotiation techniques to balance the contract, which I recommend from the perspective of more than 15 years of experience in commercial leases:
1. Do not unconditionally waive the rights conferred by law on the tenant – the right of preference to equal conditions for a new lease upon the expiry of the original contract (yes, it is also an incident in the matter of commercial leases, not just residential), the right to invoke unpredictability to renegotiate rent costs under certain conditions, etc. Use these rights as bargaining leverage to obtain concessions from the landlord – a longer period of exemption from paying rent, additional contribution from the landlord to fit-out costs, etc.
2. Define extremely clearly (possibly in an annex to the contract) the owner’s maintenance and repair obligations, with maximum completion deadlines and a reduction/exemption from paying the rent for the limitation/absence of use during these repairs ( above a certain reasonable threshold).
3. Reserve a right of unilateral termination at a certain point in the contract, with reasonable notice, but without penalties, and make sure that the owner cannot ask you at the time of termination to refund (even proportionally) his contribution to the arrangement of the space.
4. Insist on a clause that provides for the possibility of your exit from the contract if the structure of tenants from the time of signing the contract is not maintained in the shopping center (the condition may be related to the presence of a hypermarket, a large DIY store, an international fast-food chain, etc.), and the said tenant generating commercial ford is not replaced by another similar one within a reasonable time.
5. Requests the proportional reduction of the rent in the contract, if the degree of occupancy in the shopping center falls below a certain percentage and does not recover within a certain period.
6. Do not accept relocation in the shopping center at the owner’s discretionary initiative, unless the new space offered is similar in surface area, commercial ford, and access ways, and all relocation logistics are done at the owner’s expense; requests compensation for the period in which sales were affected by the relocation exercise.
7. Negotiate a maximum threshold for increasing the common costs that you will pay in advance, based on the owner’s estimate, until the annual reconciliation and a maximum limit of the annual indexation of rental costs.
8. Make sure you have the landlord’s consent in the contract to establish your workplace/head office in the leased space and to record the lease in the land register.
9. Include in the contract the owner’s obligation to provide you, within a reasonable time, all the documents necessary to authorize the activity in the rented space and all the documents that may be requested by the competent authorities.
10. Use, where possible, the “mirror” negotiation technique for penalties, sanctions, waivers, and aggravations – all of which should be straightforward and uniform for both parties to the contract.
Last but not least, perhaps most importantly – make sure you fully understand the terms of the contract before you sign it and have the landlord’s solicitors explain unclear clauses to you, including through concrete practical examples – you may find that certain contract provisions they are actually transplanted with the forceps of Anglo-Saxon common law and often end up being rejected by the immune system of native law.
