Highly respected tenant move-out procedures in commercial properties
In commercial real estate leasing, it is important that you, as the commercial real estate agent, have some defined procedures for moving out the tenant. They are almost like a checklist and that checklist will be relevant to the property, the landlord, the area and the lease. Everything must be checked.
After negotiating the terms of a lease, the central component of moving forward with the tenant is that the lease is signed correctly and legally for all parties involved. Although the tenant may have signed the lease first (this is normal), the landlord still has to sign and agree to the terms of the lease. For this very reason, the tenant should not be given access to the premises until such full acceptance has been given and the landlord approves the access. Any other obligations of the tenant must also be satisfied, such as payment of rent, deposits, guarantees and any additional agreements required.
So here is a list of some things you can include in your move-in procedures with tenants. Add to the list based on your area, property, landlord, agency, and tenants.
- The lease must be correctly signed. Normally, the client’s attorney would be involved in that process. The lawyer must confirm that all the documents are correctly executed.
- Rents and deposits must be paid in accordance with the terms and conditions of the lease.
- The tenant will normally have to provide some type of guarantee, bond or bank guarantee. That should be done and reviewed. It should be said that the size of the guarantee must be sufficient to protect the owner in times of default by the tenant. Normally this figure equates to 3 to 6 months rent and exit expenses.
- Very often a lease will involve the provision of an incentive to the tenant. This could be a rent refund, a conditioning contribution, a cash payment, or a conditioning. All of this should not be done until the tenant has satisfied the terms and conditions of the lease.
- All plans and drawings for the tenant’s equipment must be given to the owner for consideration before the tenant seeks approval from the local council or building approval board.
- Inspect the premises to ensure that everything is in order with the requirements of the lease. Take a record and photos of the facility as part of that inspection.
- Obtain tenant staff details and access approvals so property security can be modified.
- Signage and directory modifications will need to be made for the new tenant entering the property.
- Inform the tenant about access and security issues that must be met. If the building contains other tenants, this process is really important.
- Obtain the tenant’s coverage notice for insurance as provided in the lease.
- Inform the property manager of the tenant’s occupancy and introduce the tenant to the property manager.
Different types of properties will add things to this list. It is important to have a list that includes these things. This way, you can control the tenant’s move into the commercial or retail property.