3 things to remember when you sign a new office lease
Here is a prime example of what we see every day.
You have just signed your office lease, with the start date as tomorrow, and you expect to take possession and move in with your IT requirements, staff and so on the very next day.
With your current lease expired, you think all your ducks are in a row.
However, some key components are missing and, until they have all been sorted out, your movers and staff are on standby, with you out of pocket and waiting.
Many people believe that once you’ve signed your lease to your new work home, the keys are handed over and you can move straight in.
Many people believe that once you’ve signed your lease you can move straight in.
In fact, your administration has only just started. And, more often than not, it is only by learning it the hard way that tenants are taught these lessons.
So, you have agreed commercial terms, you’ve signed a leasing proposal and placed a deposit, all the hard work is done, right?
Wrong! Once leases are issued for initial review and there are no deal breakers, you then need to get underway with the bank guarantee and liability insurance.
There are three critical elements required before the tenant can gain access and possession of a property:
- The signed lease.
- Approved certificate of currency for liability insurance, noting the lessor as an interested party. This needs to be of value for $20 million along with a line item for plate glass.
- A bank guarantee that is aligned with requirement of the lease.
Once leases are issued and there are no deal breakers, you need a bank guarantee and liability insurance
To explain these in a little more depth, a bank guarantee generally takes a minimum of about 10 days after the money has been transferred to accounts. These documents are not always correct the first time, especially with expiry dates.
Read more: Smooth moves: an office relocation checklist
A bank guarantee needs to be sent as a draft version to the lessor’s lawyer prior to final issue so that there are no problems.
With liability insurance it is also critical to ensure complete coverage for local lessors.
Watch out for global policies produced to cover companies worldwide; most of the time they need some specialist wording to cover issues required by Australian specific requirements.
So the lesson is this: without these three elements you will not be able to take possession of your new office.