Time to negotiate

[Breaker]

We've been in for the second viewing of some retail space and have decided that it's for us (good location, price, floor space etc.)....time to start finalising the details.

We've got a couple of things in our favour 1) It's been empty for 12 months 2) It has a pretty severe damp problem.

And one major thing working against us 1) They're looking for a 10 year let and we only want it for 1

Could anyone give me a hand advising on a good negotiation position? We've no idea how far to push the owner, as our rental duration requirements don't meet his standards and he may well walk away if he thinks we're taking the piss.

We're going to ask for contribution to the cost of the work needed to make the place habitable (new flooring, damp proofing and painting the affected walls) but aren't sure what kind of percentage to ask for.

We want a rent free period of at least two weeks. Would asking for more be too much on a 12 month let?

The price asked seems pretty reasonable (£16,000 pa not including rates and insurace), but does anyone think that we'd get away with asking for a reduction given that we only want the property for one year?

Any misc. advice appreciated.

Ta.

 

[cjd]

10 years is absurd; you'd have to be bonkers to agree to that. Equally 1 year is no good from his point of view. Are you definately leaving in 12 months?

If so, you might as well tell him you need a one year contract but are prepared the full asking price (so long as you've checked it's the going rate) with no rent free period if he'll sort out the damp, flooring and decor.

 

[alejandro]

go for a longer period that two weeks rent free, especially with the work that needs doing and the fact that it has been empty for so long. i would be looking for at least six.

however, it is going to be very difficult for you to negotiate if you only want it for one year. why only one? also, the damp is probably going to be easy to sort out and won't be seen as a major problem when sorting out a price

 

[Breaker]

Thanks for the response.

The business plan calls for a restructuring after the initial 12 months period based on the potential of the business. If it's doing well we're going to move premises and go through a period of rapid expansion, and if it's not going well we're going to close it down and do something else.

We have considered taking the property for longer just to sweeten the deal for the landlords point of view, but don't want to have to deal of finding a replacement tenant or deal with penalties should we wish to relocate.

The damp is a major problem. The basement has 60% of the floor space, and all the walls suffer from quite severe damp. Plus, because we're in the place for only a year, we don't really want the landlord to sort it out, simply because if he's going to fix it, it'll take him months (the place has been empty a year and he's not done a thing to fix it, despite the fact that's probably the only reason it's not occupied right now).

We're happy to sort of the interior because it's going to be a whole lot quicker, and we'll have the upstairs up and running in no time, leaving us time to sort the downstairs while we're actually trading.

So what kind of duration would we be looking at if we decided we could take it for longer? I know three years is a standard, but we'd definately not be looking at any longer than 2 years. What kind of position would we be looking at from the rent free period on a 2 years let?

Anything else we need to look at?

 

[Breaker]

I've been doing some research into the costs for redecorating, laying down flooring etc, and it looks like we'll be looking at around the £3-3.5k mark, not including labour. Can anyone give an indication of what would make sense to them as being a reasonable figure to ask for in contribution to these costs?

 

[Jon123]

You could go for the 3 year contract with 1 year break clauses therefore you are more likely to get the lease and can get out after the first year.

 

[Jayne]

From experience, if the landlord does all the work to do up the property before you move in, he will put the rent up. The rent advertised is usually based on the state of the property and most commercial lease agreements will state you are the one to maintain the property. Unless you are lucky and get a good solicitor that can alter that, I'd be surprised if you got a one year lease.

If you took on the 10 year lease, you could always sell the lease or change it over to someone else and any time.

Jayne