Commercial property: what to do if the lease is not signed

In commercial property management and leasing, you often encounter the problem of the tenant delaying the signing of the lease. It can be for various reasons such as:

• Full terms of the lease are still being negotiated.
• The tenant is still finalizing his equipment design.
• The various members of the association are not all available for signing.
• The paperwork is still with the tenants’ attorney.
• The business or government department is taking time to process the document.
• Decision makers are out
• Approvals for permitted use are delayed at local council

So the list goes on and you will see many variations of the problem. Tenants will give you many different reasons why the lease is still pending. Frequently the delay process is not what it seems and there are other alternatives that the tenant adopts for their own reasons. The tenants will not tell you the whole truth; That’s a fact.

The signing of a lease is then a critical element in making the tenancy available for occupancy. In almost all tenancy situations, you’ll want the tenant to meet the following criteria before the keys to the tenancy are handed over:

1. The lease is fully and correctly signed.
2. Plans and drawings associated with the tenants’ equipment have been submitted to the owner and are approved.
3. The plans and drawings associated with the tenants of the facility have been submitted to the building control board or local council and are approved.
4. The first months of rent are paid in advance according to the documentation of the lease agreement
5. The lessor is provided with the appropriate personal or bank guarantees in accordance with the lease
6. All documentation and associated disclosures related to the implementation of the lease are properly delivered and satisfied.
7. The deposit required under the lease or lease agreement is paid

The rule of thumb in leasing a property to a tenant is that all lease requirements are met in accordance with the property manager’s instructions and the landlord’s requirements before the keys and access to the lease are handed over.

It should also be said that any incentives that are made available to the tenant as part of the new lease structure should not be released or made available until the previous six points are met.

In most cases with commercial properties, the tenants you work with are highly experienced in business and negotiation. They are likely to be more experienced than the property manager or owner. Tenants will establish the lease situation to their own advantage during the lease negotiation.

So the clear message here is that the premises should not be released to the tenant until all the documentation requirements of the lease have been properly and legally met.