Do you occupy commercial premises that you have rented from a landlord on a multi-year basis with options? If this is in the retail space, then you may be actively considering your options, especially in the light of the recent slowdown in trade. Yet how soon should you consider your situation if one of those options is ahead, and what factors should you take into account as you assess your prospects?

Stay or Go

In an ideal world and when business was more predictable, a retail tenant would often allow a "rollover" option to come and go without any drama. They would simply continue to trade with no disruption on a previously agreed basis. Sometimes, the rent would increase in line with inflation at the point of the rollover, but other conditions would probably remain the same.

Act Early

Unfortunately, life is not quite so predictable, and many other factors now come into the picture. This is why it is important to consider any lease renewal as early as possible and well in advance of the actual date. If you did this, you would have the upper hand in your negotiations, as you would have enough time to look at other options, discuss the issue with the owner or landlord and, if necessary, make a change.

Upper Hand

Remember that if you leave it until the last moment and then try to enter into talks, the other party may hold out or delay discussions, and this would not be in your favour. They would assume, quite rightly, that you would invariably stay as it would be far too disruptive to jump ship at that stage.

Looking at Options

Before you open up the discussion, however, look carefully at the alternatives. Are there any similar spaces available in the general vicinity that will offer you the same type of footfall? Are the terms offered by the other landlord favourable and, crucially, are they willing to be as flexible as possible in the current environment?

Expert Advice

You should bring in a commercial lawyer at the same time to look closely at the body of your contract. They can compare it to a draft contract supplied by an alternative landlord and let you know if you should be concerned by any specific clause. Once you are happy with the detail, you can then negotiate with the landlord in good faith and come to your conclusion.

To learn more, contact a lawyer that works in commercial law.