Simple licences are often offered on a 'take-it-or-leave-it' basis, with scope only to negotiate on the rent rather than the terms of the agreement. When negotiating a new lease, however, everything is negotiable (except to the extent that the landlord is limited by any superior lease).
As leases are complicated agreements, there is plenty of scope to trade concessions. How flexible the landlord is will depend on circumstances: if the landlord is having difficulty finding a tenant, you will be in a stronger position.
Make the most of your professional advisers in negotiations: they will have the experience and will find it easier to be dispassionate. As well as your lawyer to negotiate the legal agreement, a suitably experienced chartered surveyor who understands local market conditions can advise you on market rents and other commercial aspects of the deal. The results of your survey can be a useful negotiating tool, with every defect you have identified being an opportunity to ask for a concession. 'Selling yourself' as a good tenant - by demonstrating your creditworthiness and showing yourself to be trustworthy and easy to deal with - can also help.
Your negotiating targets might include:
- Reducing or avoiding any initial lease premium charged for the purchase of the lease.
- An initial reduced rent or rent free period, particularly if you will need time to fit out or adapt the premises.
- Avoiding being responsible for paying the landlord's legal costs while negotiating the deal, or at least agreeing a cap on them.
- Agreeing a cap on other charges, such as any service charge.
- Reducing the extent of any security you are required to provide, for example by agreeing that any deposit you pay will be refundable after a set period, and particularly avoiding giving any personal guarantees.
- Ensuring that you have flexibility to exit the lease, through the right to assign, break clauses and so on.
- Minimising any restrictions on how the premises can be used or adapted.
- Avoiding upward only rent review clauses.
- Limiting the extent of the repairing obligations so that you do not have to put the premises into a better state of repair than they are at the beginning of the lease.
