Lease, Legal & Commercial

THE MARIS METHODOLOGY:

THE CRITICAL PATH

We advise clients to view the lease process not as a legal hurdle, but as a commercial lever.

1. Timing is Leverage: Relocation timelines often hinge on lease negotiations. If you leave it too late, you lose leverage.

• The Timeline: Initiate discussions 12–18 months before your lease expires.
• The Milestones: Map out the dates for Heads of Terms (HoTs), legal review, and landlord fit-out consent.

2. Heads of Terms (HoTs): This is the most important document in the process. The Heads of Terms outline the principal deal points before formal legal drafting begins.

• The Content: HoTs should cover rent, lease term, break clauses, rent-free periods, and fit-out rights.
• The Strategy: Ensure both parties agree in writing before lawyers are instructed. Use the HoTs to anchor the deal to your commercial strategy.

3. Alignment with Fit-Out: Lease terms must align with your design intent.

• The Check: Ensure your fit-out partner reviews the lease clauses regarding Alterations. Can you install a shower? Can you knock down a wall?
• The Risk: A delay in “Licence to Alter” (landlord consent) is a common cause of programme delay.

THE CFO’S CORNER:

HIDDEN COSTS & INCENTIVES

You must look beyond the headline rent to understand the Total Cost of Occupation.

Landlord Incentives:
In competitive markets, landlords offer incentives to secure quality tenants.

• Rent-Free Periods: Typically, 3 to 12 months where no rent is paid. This cash flow benefit is often used to fund the fit-out.
• Capital Contributions: Direct cash payments from the landlord to improve the asset.
• The Warning: Be aware of “clawback provisions” where you may have to repay incentives if you exercise a break clause early.

Dilapidations (The Exit Cost):
Many businesses overlook the cost of leaving their current office.

• The Liability: You are likely legally obliged to return your old premises to its original condition.
• The Action: Commission a Dilapidations Survey 9–12 months before lease expiry. Negotiating a cash settlement is often cheaper and cleaner than doing the reinstatement works yourself.

MARIS TOOLS:

THE LEGAL REVIEW CHECKLIST

Before signing, ensure your legal team has stress-tested these specific clauses.

• Repairing Covenants: Are you signing a Full Repairing and Insuring (FRI) lease? If so, you are liable for the roof and plant. Ensure you aren’t inheriting “latent defects.”
• Reinstatement: Are you required to strip the office back to “Shell and Core” when you leave?
• Subletting Rights: If you downsize in 3 years, does the lease allow you to sublet part of the floor to another tenant?
• Service Charges: Is there a cap on the service charge?