A lease is an agreement of terms between a tenant and a landlord which both parties have to stick by. These terms are for the smooth functioning of a financial agreement regarding the rents, lease break clauses and many other terms between both sides. A lease re-gear provides an opportunity for the revision of the terms and clauses before the end of the already existing lease. The primary factor of this lease re-gear is the mutual benefit of the tenants and the landlord so that both can enjoy a win-win situation.
Everyone is aware of the economic downturn faced by the country now, and landlords and tenants have realized that mutual dependence is more beneficial in the repressive economic conditions. Due to challenging economic conditions, the majority of the tenants are unable to keep up with the monetary needs of the properties, which leads to offloading of them. With proper negotiations, the landlord, rather than losing a potential consumer, can come up with improved terms and beneficial lease clauses better suited to both parties. If the landlord doesn’t want to deal with a potential tenant and the tenant is interested in the property, then re-gearing your lease agreement is profitable. You can discuss details like lower-rent, adjusting lease period, break clauses and repairing obligations. You can also either concoct a whole new agreement based on mutual profit or add better-revised clauses in the pre-existing one.
Following are the clauses which both sides have to keep in mind before agreeing to a re-gearing lease.
- Details about rent and when it will be payable
- Repairing clauses
- Lease length
- Break clauses and all of its reasons and potential agreement at the end of it
The parties also have to keep in view the current troubling financial times for better results. Also, both sides, while signing up a new lease are exempted from the old one, so if you want to keep an old term of the agreement make sure that you add it in the new one too as the previous one will be null and void.
Both tenants and landlord can benefit from this. Find out more about lease re-gear here.
The tenant can revise their lease and refocus on the new agreements in a better way. They can also negotiate for improved rent conditions as well as some rent-free periods. Lowering your rent is never a bad idea and what better time to bring it up. You can also secure the property for a more extended period with a break clause if it is profitable to you. The landlords can also benefit from this. A property leased on a lower rent is way better than an empty one. With this enhanced period, you can maximize your profit and have capital uplifts. Preemptive enquiries regarding the re-gearing with your tenants can lead to preserving your investment if you are thinking about selling. Re-gearing your lease is always encouraged and is highly profitable if you can come to mutually agreed terms for more extended periods.