How To Say No To Your Landlord During A Lease Renewal

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How To Say No To Your Landlord During A Lease Renewal

In the previous post, we learned what you should choose between Lease renewal vs. relocation. Now, what if tenants don’t want to choose any of these options? In that case, you can negotiate on lease renewal with your landlord or say no to lease renewal. But how to say no to your landlord for a lease renewal? Today here you will find the answer to this.

If you’ve ever had to negotiate a lease renewal directly with your landlord, you know how difficult, embarrassing, emotional, time-consuming, and unpleasant the process can be. When a lease is renewed, several factors come into play. These factors could result in major financial loss or the impression that you aren’t getting the greatest deal possible on a substantial investment.

A healthcare practice’s viability during a lease negotiation depends on a variety of criteria, including:

  • Since moving can be expensive and cumbersome, most healthcare practitioners stay in the same place for at least 10-15 years, and many stay considerably longer.
  • Healthcare spaces require significant investment and have significantly higher build-out expenses than standard office space.
  • Depending on who has the better negotiating position, the most information, expertise, and options, negotiating lease terms can result in a 6- to 7-figure financial swing in favor of the landlord or tenant.
  • Any additional costs incurred during the renewal discussion are subtracted from the practice’s revenue.
  • Only a few leases may be signed by tenants over their careers, whereas landlords are likely to deal with hundreds of leases.

To increase their profits, landlords are well aware of these facts. They are not afraid to become aggressive and exert pressure, particularly when dealing with a novice renter who is unrepresented.

Read More: NNN vs FSG Lease

How To Refuse Your Landlord’s Requests

When tenants decide it’s in their long-term interests to hire a knowledgeable agent to negotiate their lease agreement renewal, they must inform the landlord of this decision. This communication, whether by phone or email, is crucial. How this dialogue is conducted affects the tenant’s position, eventually influencing the negotiation’s conclusion.

The most effective course of action for a renter after securing an agent is to have the agent negotiate with the landlord on their behalf. The most successful businesses in the world usually hire representation or have professionals on staff, so a considerate landlord will fully comprehend the tenant’s position and demand representation. Unfortunately, some landlords don’t respect a tenant’s decision and instead attempt to work around the agent since they realize a renter with a strong game plan and a buyer/tenant-only agency could lose them the sale.

Why would a landlord not follow a tenant’s request to deal directly with their agent if the tenant has requested that the landlord do so? Among the foremost causes are:

  • They believe they are entitled to direct communication because the tenant is either their client or a friend. However, the tenant is their tenant and not their client.
  • They know that if an agent is engaged, they will be working with someone with at least the same level of commercial real estate experience as them. This eliminates the landlord’s “home field advantage” and levels the playing field.
  • They are happy to pay fees for new renters who have never given them a penny to occupy their premises. However, they do not want to pay brokerage costs.

Any of these causes will most likely lead a landlord to disregard the tenant’s argument. Instead, they will get in touch with the renter personally and persuade them to try to remove their agent from the negotiation. A renter must have the ability to refuse their landlord in this situation confidently. Setting the parameters of the negotiation and rejecting a landlord professionally would sound like this:

“As a healthcare professional, I know that one of the biggest expenses in my clinic is real estate, which I am not comfortable addressing alone. Since I’m not an expert in real estate, I’ve engaged a specialist who will be pleased to chat with you. They will try to come to an amicable agreement on a solution. All negotiations should proceed through my agent, please.”

The tenant may continue if the landlord doesn’t accept the initial “no” as a response by:

“I have engaged an agent to work with you in taking care of my healthcare real estate needs, just as you come to me for your center rather than addressing your medical needs and procedures yourself. I’m sure you can see that I don’t have any real estate options or experience, just like you don’t have any medical experience. Thank you for respecting my choice to conduct this transaction this way.”

Any additional pressure from a property owner signifies that they are trying to take advantage of you and are only thinking about themselves. Any response from a landlord that isn’t considerate and meets a tenant’s request should only serve to confirm to the tenant that they were suitable to hire counsel.

Additional information  As you start looking around and studying how to lease office space, you must know what you are looking for in a suitable workspace. Follow the link to know more about leasing your office space.

CONCLUSION

The bottom line is that as a healthcare tenant seeking a lease renewal, you can proceed confidently, knowing that a lease renewal process is always negotiable. You can hire a skilled healthcare real estate agent to act as your representative in renewal negotiations. You can confidently hold on to your position even when a landlord tries to pressure you into dealing with them directly.

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