Learn about Lease Renewals, Lease Resets and Lease Rescues

Lease renewals

Your lease is ending. What’s the plan ? Do you have a option to renew ? Should you exercise it ? What are your alternatives to a lease renewal ?

How do I know if I have an option to renew ?

The lease will say so. Look at the front pages, do you see the words “With an option to renew for a period of…” ? Look closely. What does it say ? Reference to options are repeated throughout most leases. If you are a retail tenant, the option details will also be set out in the disclosure statement.

Should I exercise the option ?

Exercising an option means you will get a new lease along the lines of what you have already agreed. That is a lease renewal.

As an alternative to a lease renewal, some tenants have the opportunity to reset their lease and get a better deal. That is, if they are alert and use the time available to them. Depending on the business, 2 to 3 years away from lease expiry is a good time to start planning key conversations. The next best time is now.

Lease Resets

Who do I talk to about getting a better deal ?

Us. You talk to us about lease renewal and lease reset.

Doing better than the deal you have is called a lease reset. Tenants can need a lease reset at any time and for any reason. Resetting a lease is negotiation at its purest. To access a lease reset instead of a lease renewal, a tenant needs to act early with clarity of purpose.

Lease Rescues

In rough water ?

If you are experiencing adverse trading conditions (personal or otherwise) and you are beginning to question the long-term viability of your business, you may qualify for a lease rescue. The purpose of a rescue is to win more time to make a positive, informed decision about your best interests and help your team to give effect to them.

Be honest, is rent the only problem ?

Tenants make rescues harder than what they need to be by behaving in ways inconsistent with their best interests. Much is lost through delay, inaction and listening to the same people who facilitated their poor decisions in the first place.

A classic marker is asking for a rent reduction. If you have, know that these sorts of knee-jerk requests limit your ability to negotiate. Before any negotiation you need to adopt the correct mindset, positioning and behaviours in line with your best interests. If you knew your best interests, would you act against them ?

Rescues are always part of something bigger. We help tenants to zoom out and get some much needed perspective. With the right distance you can see the bigger picture. It is there, at that level, that your alternatives appear.

To see if your business qualifies for a lease rescue ask us for a support call. Retailers welcome.

Information on this website is not legal advice.

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