Leasing can be a major undertaking.  Despite this, once entered into, leases can be quickly forgotten – that is until the letter arrives from the landlord’s lawyer reminding you of the upcoming termination date.

Bob’s case is a classic example of what not to do, but is unfortunately too common.  For some time Bob had wanted to relocate his business to new premises, but was “too busy” to sort it out then the termination date was upon him.

Without more time, Bob could only relocate temporarily to unsuitable space until he could find something more appropriate.  This process took 12 months and meant additional costs, the hassle of two moves, and losing a lot of customers.

Bob and his business could easily have avoided the problem with good business planning, which includes factoring in lease expiry dates and/or renewals.

It is crucial for all business owners to know the important terms of their existing lease, including the expiry date.  This enables you to make sound decisions about whether you will move or stay put well in advance of the end date.  We recommend a minimum of six months and preferably nine months as a lead-in period.  What does this allow you to do?

  • Test the market to see what is available and at what cost.  Is the grass truly greener somewhere else?
  • Assess whether your existing space is adequate for both current and future needs.  This is important especially if you have expansion plans.
  • Quantify any “make good” lease obligations.  What is the cost to put things back to how they were?
  • Weigh up the actual costs of moving.
  • Assess costs of any refit to existing premises or outfitting new premises.  Include the timeframe for any consents needed.
  • Properly assess the “hassle factor” of moving e.g. changed phone numbers or equipment.
  • Recheck your location (to market, suppliers and staff).
  • Negotiate with the landlord in a timely and appropriate manner.
  • Focus on what needs to be done.
  • Make a considered decision about staying or going.

Letting your landlord know you are looking can also assist with the negotiations, particularly if the market softens.

Having the time to follow through on these matters will ensure that when the time comes, you will be prepared, and can make good decisions about the future of your business.