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Grant of a lease: What to think about when negotiating Heads of Terms (HoTs)

A good HoTs will answer all key questions which may arise on the grant of a lease, so that negotiation on commercial issues isn’t required further down the line, saving both time and money in the long run.  It is crucial for prospective tenants to think long and hard before entering into negotiations on lease terms.  Some important questions include:

  • Term:  How long will the property continue to meet the business needs of the tenant?  A small, fast growing company may outgrow a property in its first few years.  It is important that the term of the lease is right and provides a sufficient break clause for the tenant, while maintaining the right balance against the costs of relocation and commercial upheaval.

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