A good commercial property broker will know the landlords and tenants of each building, which buildings are to let and for sale (including unadvertised properties also called hidden stock), tenants, investors, and owner occupiers
looking, average achieved rental rate per m², and finally the average achieved selling rate per m² in the area. Commercial property brokers have in most cases worked in an area for a reasonable amount of time and thus have
the property market knowledge to provide advice and leverage your case in negotiations to secure you the best deal.

Generally, landlords pay broker commission. However, there are instances where the tenant is liablefor broker commission. This will usually be negotiated and then stated in offer to lease, leaseagreement or separate agreements.

Put simply, a commercial property is a property with the relevant zoning permissions to be used for business activities. Commercial properties include but are not limited to retail shopping centres, office buildings, industrial
properties (warehouses, factories etc), hotels, schools, medical centres, student accommodation and so on.

In commercial leasing there are various expenses involved which could be once-off, monthly and annual payments. Costs can include but are not limited to:

– Ops costs (also called operational/operating/running costs)

– Body corporate costs

– Municipal and utility charges

– Parking costs

– Escalations

– Deposits

– Value-added tax

– Leasing administration fees

– Moving costs

– Fit-out/Installation costs
Please refer to our blogs for more information on these costs.

We recommend searching at least 6 months prior to your move. This provides time to find a space that is fit-to-spec and make an informed decision. Though, we recommend that if a space is fit-to- spec that you make an offer early
to secure your next leasing premises. Also, be sure to check your current leases option to renew notice period as you may have a deadline to give notice to your current landlord.

In the long term, owning commercial property is typically more economical than leasing as you won’t be “losing” your rental. Leasing is still popular because many businesses choose not to devote their capital to a commercial property
asset. If your business can afford to purchase a commercial property, are a sound business with a proven track record, and have found a building fit-to-spec for the duration of your bond (typically 10 years) then purchasing
may be the right choice for you. If not, leasing is the way to go.

This depends on your requirements. Some statements below could help guide you:

– Our lease is expiring within 6 months

– We need more space

– We need less space

– We’re paying more rent than the market

– We’re paying additional costs other tenants aren’t

– We need more parking

– We need to be closer to public transport

– We need a building with a generator

– We need to feel more safe and secure

– We need a more vibrant area where we can have drinks after work

– We haven’t enjoyed leasing this premises

– We’re unable to negotiate our renewal terms

– We’ve decided not to renew our lease

If you relate to a few of the above, we recommend looking at the vacancies in your area. You havenothing to lose. Here’s a link to our properties TO LET:

This depends on the strength of your offer to lease. We find that pressure can sometimes cause harm to the relationship between landlord and tenant. Generally, 5 working days for a private landlord and 10 working days when dealing
with a property fund.

Generally, 3-5 years but some landlords will consider 1 to 2 year leases. However, we recommend offering a lease period that you as a tenant are certain you can meet the obligation(s) thereof.

Commercial leasing deposits are generally 2 months, dependant on the outcome of relevant credit checks, FICA documentation and suretyship securities provided. We recommend that you ask your broker or landlord whether the deposit
is paid on first year’s rental or exit rental as these can be vastly different.

This is landlord dependent. Sometimes landlords prefer to have the deposit “in hand” as security.

Tenant installation allowance also known as T.I.A or T.I is a value/allowance provided by the landlord for the tenant to improve the premises by means of fit-out. As an example, this could include flooring, drywalling and so on.

Beneficial occupation also known as B.O. or Rent-Free period is usually a period where the tenant is free of paying monthly rental before the commencement date of the lease, this allows the tenant to use this time to their benefit
for fit-out or establishing its brand. Generally, all other costs will still be charged to the tenant outside of the monthly rental which includes but is not limited to electricity, water, sewerage, refuse and so on.

Generally, between half a month to one month per year signed is accepted as tenant installation allowance or beneficial occupation. We find that after COVID-19 started, beneficial occupation or rent-free is often preferred over
tenant installation allowance.

Escalation is the percentage increase of monthly rental annually.

Generally, 7%-10% is the norm dependent on the lease terms negotiated.

This is landlord dependent, but generally 2 year leases and longer.

The occupation date could be in the form of a beneficial/rent-free occupation date or an agreed date that the landlord has permitted you as the tenant access to the leased premises. The commencement date is the commencement date of
your lease agreement obligation(s).

An option to renew is a clause that can be inserted to an offer to lease and lease agreement. This gives the tenant the right to another fixed term of the lease if both landlord and tenant agree on the renewal lease terms. There is
typically a notice period for the intent to renew the lease and is between 2-6 months.

A tenant has nothing to lose having this in the lease as it gives them the option to renew the lease, or to move on to another premises. It becomes more important when you are leasing in an area with a low vacancy factor, where finding
a fit-to-spec premises is difficult or you don’t need to move.

Surety can be seen as a means of financial security from the tenant in a form of collateral for the landlord. Surety binds the representative(s) signing suretyship at personal capacity (personal assets etc) in addition to the entity
already bound on the lease. This is only applicable to the representative(s) providing consent on the offer to lease and lease. When suretyship is not signed, the landlord will usually want a larger deposit such as 3 or 4 months.
However, some landlords will not accept an offer to lease or lease without signed suretyship.

This is landlord dependent. You are not forced to sign suretyship, in this case generally a higher deposit of 3-4 months is offered to the landlord. However, some landlords will not accept a tenant without suretyship signed and thus
can be a barrier to securing a premises.

This is a clause that does not hurt to have in your offer to lease and lease agreement as a tenant. This clause affords you the right or preference to buy a particular property, should the landlord choose to sell it and you meet the
asking terms.

Common areas refers to areas and amenities which provide services on a non-exclusive basis to all tenants in the building or floor and in some cases also the public. Examples of this include but are not limited to lifts, lobbies and
so on. Generally, this is charged to the tenant on its pro-rata share (based on its rentable area to the total rentable area).

Usable area is the space that you can physically occupy or use, excluding common areas. Rentable area is the same, except this will include common areas such as lifts, lobbies and so on.

Ops Costs are generally charged to the tenant by the landlord. They can be seen as running costs of the building and include but are not limited to repairs and maintenance, security, garden services and so on.

Subleasing, also known as subletting commercial property is typically when a sublessee takes over the tenant’s rights and obligations for a space until the headlease expires. This usually entails sharing the space between the lessee(tenant)
and the sublessee (third-party tenant), or the sublessee using the full space. However, the lessee(tenant) remains liable for any damages caused as per the headlease. Generally, leases do not allow subleasing and so would require
written approval from the landlord or an addendum to the lease. We recommend consulting legal advice from an attorney beforehand.

This is typically in a retail environment and is popular in shopping centres. This is an agreed percentage of the tenant’s turnover, which is then paid in rent, as opposed to a fix amount.

Generally, the tenant will be charged for electricity, water, sewerage, refuse and rates on increases but is not limited to these charges. This depends on what the landlord asks for, but most importantly the lease as the lease is enforceable
by law. For this reason, we recommend having your preferred attorney review the final lease before signature. We also recommend comparing the accepted offer to lease to the final lease before signature.

Various factors influence the negotiation process such as the tenant and landlords’ financial position, vacancy factor in the areas and so on. A way to negotiate a better deal is to sign an offer to lease on paper. This starts a negotiation
and provides telling information on what is and is not negotiable.

It depends on how strong your offer to lease is. If leasing terms are agreed on early, it can be concluded in about a week. However, some negotiations can take more than a month especially where external suppliers are involved such
as city council approvals and so on.

When it comes to any contract or legal document, we recommend an attorney review these before you sign it.

This depends on your signed lease agreement. Generally, a landlord maintains the outside of the property and a tenant the inside.

We find that when offers are delayed or rejected – either the terms are not meeting the landlords’ asking terms, or they are unsure whether the tenant can fulfil its obligations of the lease. For this reason, we recommend in addition
to the below documentation to always accompany your documentation with a business plan. A business plan shows landlords some security, level of detail and thought going into the business. It can assist landlords to make an informed
decision, especially where a start-up is concerned.

FICA documentation generally required for (Pty) Ltd or Close Corporation (CC) entities: – Signed resolution authorising representative to sign on behalf of the company

– VAT Registration Certificate (If applicable)

– Proof of income tax registration from SARS

– Identity documents (IDs) of all current directors/members listed on company documents, and persons representing the transaction

– Proof of residential address of all directors/members and persons representing the transaction

– Copy of all company documents

FICA documentation generally required for a Sole Proprietor or signing in Personal Capacity: – Identity document of the individual

– Proof of residential address of the individual

– VAT registration certificate (if applicable)

– Proof of Income Tax Registration from SARS

FICA documentation generally required for a Partnership entity: – Identity documents of all partners

– Proof of residential address for all directors and persons representing the transaction, not older than 3 months

– Signed resolution authorising representative to sign on behalf of the Partnership

– VAT registration certificate (if applicable)

– Proof of income tax registration from SARS

FICA documentation generally required for a Trust entity: – Trust registration document

– Identity documents (IDs) of all Trustees, Beneficiaries and Founder

– Proof of residential address of all Trustees, Beneficiaries, founder and persons representing the transaction

– Signed resolution authorising representative to sign on behalf of the Trust

– VAT registration certificate (if applicable)

– Proof of Income Tax Registration from SARS

FICA documentation generally required for a Non-Profit Organisation (NPO) entity: – NPO founding documents (constitution or deed of trust, and memorandum and articles of association and so on)

– Identity documents of all founders

– Proof of address for all founders

FICA documentation generally required for a Non-Profit Company (NPC) entity: – COR39 Confirmation Registration

– NPC MOI Notice of incorporation

– NPC registration certificate

– Identity documents for all directors

– Proof of address for all directors

– Signed resolution

– SARS Tax Clearance certificate

– Proof of banking details

FICA documentation generally required for a Trade Union (TU) entity: – Certificate of registration

– Constitution

– Identity documents of all founders

– Proof of address for all founders

The landlord will provide their banking details upon signature of the lease, usually on an invoice. We always recommend calling the landlord to confirm the banking details are correct before making payment. Some landlords have different
requirements, common payment methods include but are not limited to:

 Debit orders

 Stop orders

 Electronic transfers (EFT)

 Bank deposits

It is important to always provide proof of payments to the landlord.

Failure/Withholding of payment(s) on the date of required payment is a breach of the lease agreement. Such action(s) gives the landlord the right to cancel the lease agreement and to sue for specific performance. Final demand letters
and interest can be accrued to your rent account in the event of delayed rental payment and hence it is very important to ensure that rent is paid promptly and consistently. This is intended as a guideline only, and we recommend
you seek legal advice from an attorney.

This depends on the signed lease agreement. If there is a break-clause weighted to the seller, this gives the purchaser the power to terminate the lease agreement and either replace your lease with another tenant or occupy the leased
premises. Your lease may have the unusual break-clause weighted to the tenant, which allows you to terminate the lease with a notice period. If there is no break-clause in the lease, then the purchaser (new landlord) is bound to
honour the lease agreement existing at the time of sale. This is intended as a guideline only, and we recommend you seek legal advice from an attorney.

This depends on the signed lease agreement. Generally, leases would state that written approval is required from the landlord before any changes can take place. Please refer to your signed lease and seek legal advice from an attorney.

We recommend consulting legal advice from an attorney. Sometimes meeting face to face with the landlord can go a long way – see if you can come to some agreement such as a penalty payment, convenient notice period, staying until a
new tenant is sourced, paying new broker commissions and so on. Often, sending just an email to terminate a lease can be interpreted by the landlord as impersonal and can cause miscommunication and unnecessary problems.

It depends on your offer to purchase. It can be subject to a due diligence period which is typically between 5-30 working days. It can also be subject to finance which is typically between 30-60 calendar days. Once these conditions
are met, it becomes unconditional in which the deeds office transfers the property which can take a further 6-8 weeks. So generally, the process can take around 4 months.

A due diligence clause is typically a period between 5-30 days which allows the buyer/purchaser to undertake a thorough investigation of the commercial property in question. It is stipulated in the offer to purchase and comes into
effect after signature thereof from the seller and the buyer/purchaser. The investigation includes but is not limited to investigation of the income stream and expenses linked to the property, zoning certificates, roofing,
electrical, plumbing inspections and so on. It is a buyer/purchaser weighted clause in a sense that during this period, the buyer/purchaser may terminate the offer to purchase at any time regardless of the investigation findings.

Documents and proof (where applicable) to ask for include but are not limited to:

– Total income overview

– All lease agreements (including addendums)

– Copy of the municipal and utility bills (rates bill etc)

– Copy of the levies bill

– Body corporate rules of the scheme

– Latest audited financials of the body corporate

– Latest AGM meeting notes

– Overview of the details of the unit

Documents and proof (where applicable) to ask for include but are not limited to:

– Total income overview

– All lease agreements (including addendums)

– Copy of the municipal and utility bills (rates bill etc)

– Insurance bill and contact numbers

– Repairs and maintenance bill and contact numbers (spend)

– Management fee bill and contact numbers

– Security bill and contact numbers

– Garden/Landscaping bill and contact numbers

– Copy of all service agreements

– Any other expenses linked to the property

– Title Deed

– Building plans

– Surveyor General (SG) Diagram