A comprehensive water-tight lease is good for relations with tenants
also has a responsibility – to ensure the terms are fair and compliant with the Consumer Protection Act.
Commercial property consultancy Galetti Knight Frank believes the process begins with matching appropriate landlords with tenants.
Co-founder and joint chief executive Tony Galetti says: “It makes good business sense to nurture trustworthy relation- ships with landlords and tenants, so we go to great lengths to help both parties meet their objectives.”
Galetti suggests a number of tips to help ease the process and ensure a mutually beneficial outcome.
● Ensure time is on your side: commercial tenants obviously need to ensure it’s business as usual to avoid financial loss, so making early enquiries about lease renewals with a landlord is highly recommended. Tenants are in a far stronger position to negotiate if they have allowed for enough time before the agreement expires.
● Do your homework: the office space rental market has been flat for two years, so tenants are advised to compare rentals across different areas and have a basic idea of market conditions standards.
● Be above board: being fair and reasonable in the terms of the lease is advisable and sets a tone of mutual respect between landlord and tenant.
Thanks to the Consumer Protection Act, which also covers lease agreements, landlords are required to be fair and reasonable.
The act applies to all com-
industry mercial leases entered into with natural persons as well as juristic persons with an annual turnover or asset value of less than R2 million.
● Have a plan: it makes sense to formulate a long-term plan you can revert to. For a landlord this means, for example, not losing sight of plans to renovate or expand.
A plan will enable tenants to assess whether the space will meet the needs of their business over time, such as whether it provides suitable amenities for employees or adequate technical infrastructure.
“Using credible property brokers with regional expertise will be enormously helpful in this process,” says Galetti.
“Their knowledge of the market and their ability to navigate through the many negotiations will go a long way towards a successful conclusion for landlord and tenant. Finding good landlords and good tenants isn’t necessarily an easy task and many people can attest to having had a bad experiences.
“Like any relationship, there are people who are far more likely to entertain compromise, and others who won’t.
“But engaging a broker who really understands your business objectives and specific situation should add value and ensure a successful negotiation.”