{"id":179421,"date":"2023-02-02T00:33:37","date_gmt":"2023-02-02T00:33:37","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=179421"},"modified":"2023-04-26T00:13:46","modified_gmt":"2023-04-25T23:13:46","slug":"negotiate-lease-incentives","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/commercial-lease-property\/negotiate-lease-incentives\/","title":{"rendered":"How to Negotiate Lease Incentives in the UK"},"content":{"rendered":"\n<p><span style=\"font-weight: 400\">When looking for a commercial property to run your business from, you want to find something that suits all your needs. As your <\/span><a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/legal-elements-of-commercial-lease\/\"><span style=\"font-weight: 400\">lease agreement<\/span><\/a><span style=\"font-weight: 400\"> may likely be a large chunk of your business expenses, you want to choose the most financially suitable commercial lease. One way to do this is to negotiate lease incentives with your commercial lease agreement. These can make the property appeal more to you, help you decide which business space to take a new tenant, and ease your cash flow with a good lease agreement. To help your business, this article will explain how to negotiate lease incentives.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Lease Incentives&nbsp;<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">A <\/span><a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/lease-incentives\/\"><span style=\"font-weight: 400\">lease incentive<\/span><\/a><span style=\"font-weight: 400\"> is a perk a commercial landlord offers a potential business tenant, like you, to persuade them to take on the business lease. They can also use them to entice a business tenant to renew their current lease agreement. Lease incentives cost commercial landlords, though you stand to benefit as a commercial tenant.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">Lease incentives are often in the form of either a payment or a concession. Some typical lease incentives are as follows:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">a rent-free period which is a period in the lease\u2019s fixed term where you do not have to pay rent for your occupation of the property;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">an associated rent incentive which is a period during the lease when you can pay \u2018half rent\u2019; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">compensation for fit-out works.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Negotiating Incentives&nbsp;&nbsp;&nbsp;<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">Sometimes, lease incentives may already be on offer by a commercial landlord for a specific tenancy. Where they are, they may not be exactly what you want. Therefore, understanding how to negotiate lease incentives as a commercial tenant is essential.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Key Considerations<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">Landlords benefit from rent incentives, so consider this when negotiating lease incentives. They can act as an alternative to a rent reduction, meaning your landlord retains the property value.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">Specific factors will affect what lease incentives a landlord is ready to agree to, so it is helpful to consider these. For example, the following will affect lease incentives:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">the amount of genuine interest in the commercial property;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">current market trends; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">how desirable the property is, which may depend on location.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400\">Conversely, certain factors that affect you and your business will influence you when you negotiate lease incentives. You will need to think these through carefully to determine what lease incentives you negotiate, and you should consider how your business will benefit from those you select.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Timing<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">You should negotiate lease incentives before making a decision to take on the business premises. Most incentives are agreed upon with the agent or the landlord (where there is no agent) at the pre-lease stage. Likewise, you would document the agreement in a <\/span><a href=\"https:\/\/legalvision.co.uk\/corporations\/heads-of-terms\/\"><span style=\"font-weight: 400\">heads of terms<\/span><\/a><span style=\"font-weight: 400\">.&nbsp;<\/span><\/p>\n\n\n\n<div class=\"box box--icon box--info\">\n<p><span style=\"font-weight: 400\">A heads of terms is a commercial document that is usually prepared by the landlord\u2019s agent. It is important as it forms the basis for the commercial agreement. The landlord is less likely to grant an incentive if you have already agreed to the commercial terms of the lease and they are preparing the legal documents.<\/span><\/p>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Reasons<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">When suggesting specific lease incentives or variations to a commercial landlord, you need to be clear and what you want and why. It is important to have sound reasons to justify the incentive as part of your lease agreement.<\/span><\/p>\n\n\n\n<div  class=\"box box--icon box--idea\">\n    <p><span style=\"font-weight: 400\">For example, suppose you want to negotiate a rent-free period as a lease incentive in your agreement. As such, you may wish to research the property market in the area to see how sought-after the property may be. If it is not popular or has been empty for a while, the landlord may be desperate to rent the space. Indeed, if you turn them down, they may not have another interested party on standby.<\/span><\/p>\n<\/div>\n\n\n\n<p><span style=\"font-weight: 400\">Alternatively, you may need to do a lot of work before the commercial space is ready for you to operate your business. Therefore, you may suffer a loss of business, which you can raise with your landlord to seek compensation via a rent-free period.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">Another example is if you want to negotiate compensation for fit-out works, you may ask for a rent-free period to reflect these costs. Sometimes the landlord will agree or at least compensate for some of these costs. However, if you can present the landlord with works that benefit them, such as those they can use when you leave or those which add value to the building, they may be more willing to grant the incentive.<\/span><\/p>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+448081968584\" class=\"not-prose\">0808 196 8584<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    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Lease incentives are perks your landlord offers as part of the lease agreement, such as a rent-free period in your lease. During negotiation, you want to consider the landlord&#8217;s position and yours as a business owner and find reasons to back your requests.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">If you need help understanding lease incentives for commercial property, our experienced <\/span><a href=\"https:\/\/legalvision.co.uk\/leasing-lawyers-lp\/\"><span style=\"font-weight: 400\">leasing lawyers<\/span><\/a><span style=\"font-weight: 400\"> can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. So call us today on <a href=\"tel:+448081968584\" class=\"AVANSERnumber dynamic-number\">0808 196 8584<\/a> or visit our<\/span><a href=\"https:\/\/legalvision.co.uk\/membership\"> <span style=\"font-weight: 400\">membership page<\/span><\/a><span style=\"font-weight: 400\">.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Frequently Asked Questions<\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1675297762450\"><strong class=\"schema-faq-question\"><strong>What is a lease incentive?<\/strong><\/strong> <p class=\"schema-faq-answer\">A lease incentive is where your landlord offers you something as part of your lease agreement to entice you to take that lease, such as a rent-free period.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1675297776898\"><strong class=\"schema-faq-question\"><strong>Why might my landlord negotiate a lease incentive?<\/strong><\/strong> <p class=\"schema-faq-answer\">Whilst a rent incentive is a cost to your landlord and a benefit to you, they also help keep your landlord\u2019s property at market value, which is why they negotiate them.<\/p> <\/div> <\/div>\n","protected":false},"excerpt":{"rendered":"<p>When looking for a commercial property to run your business from, you want to find something that suits all your needs. As your lease agreement may likely be a large chunk of your business expenses, you want to choose the most financially suitable commercial lease. One way to do this is to negotiate lease incentives<a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/negotiate-lease-incentives\/\">Continue reading <span class=\"sr-only\">&#8220;How to Negotiate Lease Incentives in the UK&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13326,"featured_media":3244,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"175310,1945,2866,175574,3773,179325","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[30],"tags":[20,21,1224,1225,1226],"class_list":["post-179421","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-lease-property","tag-small-business","tag-medium-business","tag-commercial-tenant","tag-lease-incentives","tag-negotiate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to Negotiate Lease Incentives | LegalVision UK<\/title>\n<meta name=\"description\" content=\"Negotiating lease incentives can help you can get the best deal for your business. 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Prior to her freelance writing work, Clare worked for UK central government in policy and communication roles. She has also run her own businesses where she founded a magazine and was editor-in-chief. She is currently studying part-time towards a PhD predominantly in international public law. Qualifications: PhD, Human Rights Law (underway), University of Bedfordshire, Post graduate diploma, Law, Middlesex University.","sameAs":["https:\/\/www.linkedin.com\/in\/ms-clare-susannah-f-4a243545\/"],"url":"https:\/\/legalvision.co.uk\/author\/clarefarmer\/"},{"@type":"Question","@id":"https:\/\/legalvision.co.uk\/commercial-lease-property\/negotiate-lease-incentives\/#faq-question-1675297762450","name":"What is a lease incentive?","acceptedAnswer":{"@type":"Answer","text":"A lease incentive is where your landlord offers you something as part of your lease agreement to entice you to take that lease, such as a rent-free period.","inLanguage":"en-GB"},"inLanguage":"en-GB"},{"@type":"Question","@id":"https:\/\/legalvision.co.uk\/commercial-lease-property\/negotiate-lease-incentives\/#faq-question-1675297776898","name":"Why might my landlord negotiate a lease incentive?","acceptedAnswer":{"@type":"Answer","text":"Whilst a rent incentive is a cost to your landlord and a benefit to you, they also help keep your landlord\u2019s property at market value, which is why they negotiate them.","inLanguage":"en-GB"},"inLanguage":"en-GB"}]}},"_links":{"self":[{"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/posts\/179421","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/users\/13326"}],"replies":[{"embeddable":true,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/comments?post=179421"}],"version-history":[{"count":5,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/posts\/179421\/revisions"}],"predecessor-version":[{"id":180585,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/posts\/179421\/revisions\/180585"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/media\/3244"}],"wp:attachment":[{"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/media?parent=179421"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/categories?post=179421"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/tags?post=179421"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}