18 Jun Pre Lease Condition Report

Pre Lease Condition Reports

Many who sign up to a new commercial lease overlook the importance of taking a condition report (snapshot) of the property prior to handover and fitout. A bond is always held to ensure the property is returned back to its current state. But what if the property wasn’t up to scratch in the first place? or what if you occupied a space that was partially fitted out?

A makegood clause can be so ambiguous that you may be required to remove the entire fitout regardless of the circumstances. It may even require you to improve the condition of the property beyond what may be fair. Or it could also require you to meet compliance of the building code and Australian standards even when it didn’t comply in the first place.

Unlike a residential lease agreement, the tenant is not protected by the State Government. The commercial risk lies with the company who enters into the lease.

A condition report of the existing premises by an external company can mitigate your risk by ensuring that a detailed account of the condition of the property is carried out so that when it is time to hand over the property to the landlord, there is no dispute over the condition of the property prior to occupation.

Office Property Report Inclusions

A property report for an office usually includes the following;

• A detailed photographic report of the property.
• Report on floor finish condition.
• Report on ceiling grid, tiles and services.
• Report on wall finishes and condition of paint and claddings.
• Report on any partitions, features and fixtures.
• Observations and comments on each item.

Warehouse Property Report Inclusions

A property report for a warehouse usually includes the following;

• A detailed photographic report of the property.
• An external report of the property including carparks and hardstands.
• Report on warehouse and office floor finish condition.
• Report on structure, ceilings and grid, tiles and services.
• Report on wall finishes and condition of paint and claddings.
• Report on any partitions, features and fixtures.
• Observations and comments on each item.

Conclusion

A property pre lease condition report could save you money in the long run and is a sensible investment to make in order to minimise your commercial risk in the long run. Many companies don’t budget for an office make good and the cost for handover of a property usually comes at the worst possible time when your finances are stretched with the cost of a new office and the downtime of staff and business relocation.

To book a warehouse condition report click HERE or

To book an office condition report click HERE or call us on 02 9114 6007.

If you require assistance interpreting or negotiating your lease or your makegood obligation you can visit one of our partner companies below;

• Niche Tenant Advisory –  www.nichetenantadvisory.com.au
• Makegoods  – www.makegoods.com.au