novembre 15, 2015

Legal Responsibility: what to know before renting an office space

Developing your knowledge of legal ins and outs is critical before signing a commercial lease in Hong Kong. Myriad, complex terminology and ever shifting legal landscapes make this territory fraught with hazards for any business.

Yet whilst there are real reasons to be prudent when looking to lease an office, the process can be quite easy, as long as you follow a few basic rules.

View several options before you make a decision in order to get the best deal and find the space that is optimal for you.

Setting the term of your lease

Small business owners feel they can find space and negotiate a lease on their own. But escalator clauses, renewals, free rent, tenant improvement allowances, expansions and possible termination rights can be favourable if you know how to ask. Having a broker on your side can help make the best of these decisions. The broker will also help you negotiate on rent increases over the term and renewal options. Ensuring the legality of these factors means you can’t be unexpectedly hit with a rent increase without warning from your landlord.

Take your time

View several options before you make a decision in order to get the best deal and find the space that is optimal for you. Commercial real estate landlords tag on extras like maintenance fees and upkeep for shared facilities, and you must check what you’re signing up to pay. Utilities are usually the responsibility of the tenant, but how are they measured? Might they be individually metered or apportioned by square footage? These elements are the legal areas which define your costs.

Who handles maintenance and repair

Residential leasing often places the burden of maintenance and upkeep on the landlord. Commercial property leasing is different. Commercial leases vary. Some stipulate the tenant is responsible for property upkeep and repairs. Others specify the tenant is responsible for systems such as air conditioning. Check the legal landscape within your lease.

commercial lease hong kong

Read the lease

Among all rent negociation tips, read the lease is the most important. Don’t skim; read over your lease in detail and hire an attorney who specialises in commercial real estate and Hong Kong offices to go through the clauses and fine print.

Consider building in clauses to protect your business

When you rent an office, to protect your investment and business interests, it’s worth investigating potential add-on clauses to your lease. These might include:

Sublease – This builds in some flexibility so that should your business plans change you can sublet your space to another business.

Exclusivity clause – Prevents the landlord from leasing any other premises on the development to a direct competitor of yours.

Ask for concessions

Don’t take the proposed lease at face value. There is always room for negotiating price per square foot. Ask for some period of free rent. In this market it is not uncommon for tenants to obtain several months’ worth of ‘free’ rent for multi-year lease terms.


JLL Property is a commercial office leasing specialist in Hong Kong that can help you find the perfect office. They have plenty of available advice on the legal side of rental, and experience across all aspects of leasing law.

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