commercial real estate training

Commercial Property Leasing Handover

When you lease a property, it is not just a matter of finding a tenant and matching them to a property.  There is a lot more to the relationship and the leasing deal itself.  This is where the professional property leasing agent stands well and truly above the other competitors in the market.

So let’s assume you have found a tenant in a property transaction and that you have negotiated a deal that is acceptable to both the tenant and the landlord.  Moving the parties forward to lease finality will be part of your role and focus; if you do not stay with a property transaction to the very end, others can slow or stop the transaction without your knowledge (solicitors are good at that).  Of course that will mean loss of commission and credibility.   Top agents stay with the deal to the very end on behalf of their clients or principal; you should get in a habit of doing the very same.

Here is a leasing checklist that contains some of the main issues in a leasing deal.  You can add to the list subject to your property type and location.

  1. Make sure that the lease that is created by the clients solicitor reflects the facts that have been discussed in your leasing negotiations.
  2. Get the lease signed by all the parties.  It may be that solicitors for both parties do this, however, make sure that it is done in a timely way.  Delays create uncertainty.
  3. As part of getting a lease signed, the rent should be paid together with the required lease deposit as a commitment by the tenant.  Get the money into a trust account so that the cheques are cleared (or get a bank cheque).
  4. All bank guarantees and bonds should be lodged with the right people as part of the signing and the completion of the lease documents.
  5. Double check with all the solicitors (and particularly the solicitor acting for your client), that the correct documentation has been served and signed.  Some leases require secondary supporting documentation such as disclosures and licences.  The whole bundle of documents should be treated as one and all correctly signed.  The completed and signed documents should be in the possession of the client’s solicitor.
  6. If all of the above is in order, it will be time to allow access to the premises, and hence hand over the keys.  This should be done correctly with the receipting of the keys as they are exchanged, and the documenting of the condition of the premises at handover.  These records will be required at the end of the lease when the premises are to be made good.

You can add to these items based on the property type and complexity.  Importantly you can build a great checklist to keep you on track in finalising the lease.  In the end result you will get a good commission and have a happy client.

By John Highman

John Highman is an International Commercial Real Estate Author, Conference Speaker, and Broadcaster living in Australia, who shares property investment ideas and information to online audiences Worldwide.