In commercial real estate leasing, the moving of a tenant into a property is a detailed process. Whilst the leasing agent may have completed the leasing negotiation, the work continues when the tenant is entering the property. In a multi-tenant occupancy, many tenants in the same property can be inconvenienced by the move of another. Care and planning is required.
The property manager or the landlord for a property should have a ‘checklist’ approach to introducing a new tenant to a property. In that way many of the key issues can be controlled and contained.
Here are some of the key issues to put on your leasing checklist:
- Ensure that all lease documents are correctly and totally signed by the parties on both sides of the deal. The landlord and the tenant should have signed the lease documents and any disagreements to the documents should have been removed.
- Any guarantees, bonds, and supporting documents should be signed and completed correctly. They should be with the landlord.
- Any monies including deposits, rentals, bonds, and special payments by the tenant should be provided to the landlord and correct with the lease agreement.
- Plans and approvals for occupancy and fit out design should have been approved by the landlord. It is likely that those plans will also require formal planning approval from the building authorities if a new fit out or a change of fit out is to occur.
- Signage for the tenant should be considered and approved by the landlord and the authorities controlling such.
- Undertake a condition report for the property so any problems of presentation are identified at handover. Take notes and photographs of the tenancy area. Have the tenant check the condition report and tell you of any factors of disagreement.
- Landlord’s works agreed to as part of the lease arrangement should have been completed prior to tenant handover.
- The permitted use for the premises should comply with local planning rules and zoning guidelines.
- Incentives provided by the landlord to the tenant should not be exchanged or provided until the lease is signed and all monies are correctly paid by the tenant.
- The tenant should give to the landlord a specification of all finishes and materials to be used in the new fit out construction and design. That specification should be approved prior to works commencing.
- The contractors undertaking fit out work for the tenant should be briefed on the rules of property use, access, and construction. Make sure that the contractor for the tenant is aware of (and agrees with) building base services access and approval criteria for any connection into the base building services.
- Understand how the new tenant can be moved into the property around the business of existing tenants. You may need to apply restrictions on fit out construction and tenant access to get the new tenant into their premises. The actions of removalists, goods lift access, and security for the property will all be impacted in the new tenant entering the property. Plan what is to occur and ensure that the new tenant knows the rules of access.
The property may have special factors of design or function that will also require consideration.
As a general rule a tenant should not be given the keys to the premises unless all factors of lease documentation, money, and approvals have been given and achieved. It is very hard to deal with a tenant if they have been given keys to access and yet property matters remain to be settled and agreed. Many landlords and property managers have learnt this valuable lesson through error.