Commercial lease agreements - a closer look
Date
2011-09-21
Authors
Foya, Bessie
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
This study is about the complexity of lease agreements, it seeks to establish
why lease negotiations have become have become complex leading to slower
turnaround time of finalizing the lease agreement. A survey approach was
adopted and data was collected through questionnaires and interviews from
landlords, managing agents of listed property funds and national tenants in
the commercial retail property industry in Gauteng. The findings indicate that
the turn-around time of finalising lease agreements is affected by complicated
negotiations that are a result of both parties to a negotiation having a standard
lease agreement, lease agreements that come in a large variety, lease
clauses that cannot be reduced to a monetary value and factors affecting the
property market.
I therefore recommended that to improve the turn-around time of lease
negotiations by setting aside our standard lease documents and negotiating a
new lease, negotiating upfront all terms and conditions to be included in the
lease, understanding the market conditions prevailing at the time of
negotiation is pertinent and pricing lease clauses should become an industry
norm. It was further identified that research should be conducted on the use
of lease agreements, pricing of lease clauses and identifying when standard
lease agreements are use full, which were outside the scope of this study but
are essential to fully understanding the complexity of lease negotiations in
commercial properties