Archive for April, 2011

7 things you should know before you sign an office lease

4/7 What are my exit costs?

That’s right, you can’t always just leave your office space and think that’s the end of your responsibilities! A clear case of read the fine print…

Using what is commonly known as a ‘make good’ clause a tenant must render the premises and fixtures and fittings back to the landlord in clean order repairing all damages except for ‘fair wear and tear’ which is largely subject to negotiation between the parties. There is a better than even chance that a landlord will see value in existing partitions and so my advice is to repair holes and damage to walls and at least latch paint them, thoroughly vacuum carpets and clean if necessary before the landlord inspects and will most of the time prevent any unpleasantness or large invoices.

As per clause 31 of the current ADLS lease the tenant may be asked to remove any partition walls particularly if they had erected them. That decision is largely up to the landlord thus my suggestion to address paint and repair issues.

If you have an old lease or have taken over by assignment someone else’s lease then the fine print may render some real dangers particularly if you must replace carpet. Costs will be considerable, say $50 per m2 or a minimum of $10k on a 200m2 space. To replace the carpet you will need to demolish all partition walls which will mean repairs to ceilings, plaster and paint perimeter walls (say $10-15 per m2) and even re-balance air conditioning venting.

Landlords are often happy to punt a few hours of their solicitor’s time in the hope of recovering a cash sum to pay for make good or new refurbishment. Remember read the fine print and manage your risk!

April 28 2011 | Uncategorized | No Comments »