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
What will you do in your summer holidays?
Summer time is a great time to take stock of your business and a great time to think about and diarise some property housekeeping issues that quite often get overlooked in the bustle of normal day to day business.
However if you consider this now, you can plan to carry out some crucial housekeeping duties in January when business is traditionally quieter.
Some of the not so sexy but absolutely essential items to consider to maximise your return and minimise your cost and risk are as follows:
Property Replacement Insurance: given the sizeable increases in construction costs in recent times, have you considered whether your properties are correctly insured? Do you know what you are insuring: base building and / or fit out?
Capital Expenditure Planning: what items have you planned over the next calendar year? How will they be managed?
Maintenance: are your maintenance contracts up to date and appropriate? Are there any routine maintenance items that can be efficiently attended to in this quiet time?
Tax and asset updates: Is your base schedule correct? Have you carried out any upgrade works during the financial year to date for which you can claim either a tax write off or a future tax deduction?
Condition Audits: Do you need to create or update any condition surveys of your tenanted properties?
Tenancy Make Good: Do you have a schedule of lease expiries that will occur during the year? Are there any “repairing and make good” obligations that need to be planned with the tenant?
N&B can assist with all of the above to help you really enjoy your summer holiday.
