Advice and Opinion

The key role that commercial brokers play in the end of lease or new lease negotiations

One of the most important roles that a commercial broker can fulfill is to act as an independent and objective third party adviser/arbitrator to the landlord and the tenant when at the end of a lease the time comes to make decisions on the replacement or repairing of items that show wear and tear.

This is the view of Jason Gregoriades, the Rawson Property Group’s Business Development Officer for Rawson Commercial.

“In almost all leases,” says Gregoriades, “an end of lease inspection is made mandatory and in these inspections a clear distinction is drawn between (a) items that have been damaged by the tenant and which are clearly his responsibility and (b) those which are simply showing signs of wear and tear and which may or may not be for the tenant’s account. Leases generally allow for some but not excessive wear and tear and a grey line between the two categories can be difficult to define.”

In both cases, however, there will often be a dispute over the replacement of the item or whether a repair will suffice – the latter, of course, usually being cheaper than the former.

“When a new tenant comes into a property he will in all likelihood insist on a fair number of items being completely replaced. Conversely, when he moves out he is likely to favour repairs, for the obvious reason that they are often less expensive than full replacement. Disagreements of this kind can lead to fierce arguments – but it is here that an experienced commercial broker, giving what is quite clearly an objective view, can be extremely useful to all parties and in nine cases out of ten will resolve the issue amicably, leaving all involved satisfied without the issues that can bedevil landlord/tenant relationships and which have seen so many cases having to be brought to court.”