Do you lease your business premises? Most leases give you the right to an initial term (say three or five years) and after the expiry of that, one or two options to extend for further periods of similar lengths.
The “option” is essentially a unilateral right for you to let the Landlord know that you wish to renew your Lease for a further term.
Be careful though – there are some important things to consider in exercising this right:
- The timing of exercising the option – you may only have a small window of time to exercise your right to renew the Lease and that window is sometimes “no earlier” than one date and “no later” than another. It is important that you get advice from your solicitor as to what those dates are and then diarise them in a prominent position (such as beside the main telephone) at your business so they are not overlooked. If you don’t give notice in writing, strictly as stated in the Lease, you may lose your right to stay on at the premises.
- Breaches of the Lease – the Landlord may refuse to allow you to stay on if you have breached the Lease in some way during the initial term. Some leases are less onerous and merely state that you must not be in breach at the time you exercise your option.
- Negotiate the new rent upfront – Once you have given notice to the Landlord that you wish to stay on for the further term, the new rent will usually be negotiated to be in-line with prevailing market rent. If this is the case in your Lease, make sure you negotiate that new rent before you exercise the option to extend, otherwise, you may find yourself paying a much higher rent than you were expecting. Once the option is formally exercised, you will be bound to proceed with the further term at that new rental.
As each and every Lease varies, make sure you seek your own legal advice as to the rules which will apply in your situation.
Feature – Celebration & Relaxation – Questions
How will you celebrate the holiday season? I’ll be pulling on a pair of work boots and gloves and being trade assistant/chief labourer to my husband Len at our home in Kiel’s Mountain. It will be wonderful therapy for me after spending the year behind my desk!
How do you find work life balance? The weekends are always work free and dedicated to my family, my friends and importantly to me (I deserve it!).