Protecting Your Assets by Making Good
Under typical lease arrangements the tenant is responsible for repairs and maintenance to a specified condition during the lease term and for returning the property to a defined condition at expiry.
This should not be underestimated. In terms of commercial office property, lease end Make Good can equate to 75 to 120% of the rent per square metre and more under certain circumstances.
If left to the uninitiated a lack of repairs and maintenance will lead to reduced life expectancies of the building’s elements, plant and equipment – and in turn, premature capital expenditure for the replacement of such items.
This often leads to conflict and disputes which can complicate the tenant’s relocation or the landlord’s re-letting of the premises. In some instances this can also legitimately allow the landlord to claim loss of rent, rates and other associated losses which can be significant. Continue reading
Sydney has draft environmental upgrade agreements: the race is on
It’s got Richard Branson and his Carbon War Room and potentially billions of dollars of investment in the United States. Australia is also in on the act and Melbourne and Sydney are vying to be the first to market.
It’s the race to roll out the first batch of energy efficiency retrofits for commercial buildings that pay for themselves through savings on the power bills, and use private investment funding repaid through local government rates.
The City of Sydney has recently posted a draft template for what an environmental upgrade agreement template might look like and Parramatta and North Sydney councils are close behind. The NSW Office of Environment & Heritage has posted a set of guidelines for the state wide legislation that governs the agreements.
Melbourne already has its guidelines for a program confined initially to its 1200 buildings program and could be close to the first deal involving a building of more than 40,000 and a retrofit worth between up to $14 million. Continue reading
