Q – Term of lease
A – Commercial Leases are generally 3-5yrs but there are instances where private landlords will look at 1-2yr leases.
Q – Deposit
A – Commercial Deposits are usually 2-3 month’s equivalent to your last month’s rent. Also influenced by credit checks and FICA documents submitted.
Q – Surety
A – Surety binds the Directors of the company to the obligations of the Lease. If no Sureties are signed usually a bigger deposit can be negotiated.
Q – Escalation
A – Escalation is the rate at which the tenants rental will increase by annually usually 8-10%
Q – T.I.A
A – T.I or Tenant Installation Allowances are given by the landlord for tenants to improve the premises. This usually includes items such as Carpets, Drywalls, Painting etc.
Q – Ops Costs
A – Ops or Operating Costs are charged by the landlord to the tenant for the running of the building. Ops costs include but are not limited to Security, Cleaning, Maintenance etc
Q – Common Area
A – Common Areas in any building usually include the Lifts, Toilets and Lobby’s/Receptions that are common to the whole building and charged to the tenant as a pro-rata percentage share.
Q – Usable vs Rentable Area
A – Usable Area is the actual space usable inside the office but doesn’t include Common Areas, which then becomes you Gross Rentable/Lettable Area (GLA)
Q – Beneficial Occupation
A – B.O. (Beneficial Occupation) is usually a rent period before the commencement date of the lease which allows the tenant to Fit-Out the premises ready for Occupation.
Q – What info do landlords require to support their application to lease.
A – FICA Docs, ie Company Registration, ID’s of Directors, Proof of Business Address and A business plan. A Business Plan is a good indicator of the level of professionalism of a potential tenant, especially if clients include financial info, as well as projections for the business, and this gives landlords a sense of confidence in the client.
Q – What additional monthly costs will the tenant be responsible for, over and above the base rental.
A – In most cases, tenants are responsible for electricity consumed on the leased premises, and in certain instances, also a pro rata share of refuse removal, cleaning, sewerage and security on top of the basic rental.