Lease security may not be the most exciting part of a tenancy. It rarely wins a prize for the most entertaining appendix. But when something goes wrong, it suddenly matters a great deal.
The challenge is that security is often checked at signing and then left alone. The tenancy, however, does not stay the same. It changes.
Start with the right security
There are several ways to provide security for a tenancy, such as a bank guarantee, parent company guarantee, pledge or other agreed arrangements. The best choice depends on the tenant's financial strength, the rent level, investment in the premises and the risk taken by the landlord.
Review security when the lease changes
When rent, floor areas, options or other terms change, the security should be reviewed. A guarantee that was appropriate at signing can become too low or too short as the tenancy evolves.
Typical triggers
- CPI indexation or another rent adjustment.
- Changes in floor area or refurbishment.
- An option to extend the lease.
- Renegotiation of lease terms.
- Changes to the tenant's legal structure or payment risk.
When default occurs, the routine matters
If a tenant falls into arrears, the documentation must be ready. Unpaid invoices, reminders, correspondence, the basis for the claim and the guarantee itself should be kept together. That avoids detective work when the matter is already urgent.
How Estatelab can help
Estatelab helps you keep track of leases, deadlines, documents and follow-up. That does not make lease security more exciting, but it does make it easier to manage. Often, that is exactly what you need.
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