Protecting your rights as a landlord

Landlord rightsImage Credit: Supplied

Most advice we normally read about involves how tenant rights are to be protected, and how tenants should learn to assert their rights in any property transaction. However, when it comes to things like commercial leasing contracts, the landlord on the other side of the table which you may be in, also needs to make his/her rights and interests as a building owner are adequately covered in the commercial lease. After all, it is the làndlord who has invested heavily in the property, and who would most likely bear the brunt of expenses of shouldering expenses if anything goes wrong in his/her property.

Before finalizing a lease agreement with a new tenant, you will need to take the following into consideration:

Verify the financial standing of your tenant/s and that of any guarantors attached to the lease; ensure they have sufficient means to back their contract in case the business faces some difficulties in the future

Familiarize yourself with your tenant’s business plan to get a good assessment of the compatibility of his business strategy with the location of your property since the eventual success or failure of the enterprise will have an effect on your tenant’s capability to fund the lease. It would be useful to include a specific-use provision so that the tenant cannot just decide to start a different business altogether which may not be in synergy with your own business plans, or start one which may be detrimental or undesirable

Check if your tenant has adequate insurance cover in case of an accident, emergency, catastrophe or a natural disaster

Ensure you have full control of the possibility of a transfer right so that you have the final say in case your tenant decides on transferring the business to another owner

Be stringent in your selection, and always calculate for future price escalations when establishing your leasing rates.

Handy Hints
• Ensure tenants have sufficient financial means to back their lease
• As landlord, be familiar with your tenants’ business plans to ensure clarity of goals
• Ensure you have full control of the possibility of a transfer right

Source: Lovely Claire CD, Special to Properties
The writer is a freelancer


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