In the present economic environment, many tenants will be seeking to vacate premises, reduce the size of their premises or renegotiate their leases, so times are tough for landlords. Furthermore, tenants who were ‘good tenants’ or who seemed financially strong may now be a less attractive proposition than they once were.
Here are some tips for landlords to help deal with tenants when a break clause in a lease is looming:
- Be ready. Do your research on your tenant and try to anticipate their stance. Get up-to-date accounts and look at their operation. A short visit can often be very illuminating;
- Be ready to remarket your property if negotiations with your tenant break down or they wish to terminate. Put together a pack containing all the necessary planning consents, searches and so on, so a prospective new tenant is in possession of all the information they need to make a decision straight away;
- Make sure you know when and how notices must be issued. The notice you receive from your tenant may not be valid;
- If your tenant wishes to renegotiate their lease, make sure you know your market and can ascertain what their other options might be. Also, consider asking for better security; and
- If you think the tenant is likely to default, remember that your right to repossession of the property may be delayed unless you act first.