Lease restructuring present the tenant, property owner and all other parties involved the opportunity to restructure, revalue and renegotiate contract terms of a property in order to accommodate new amendment agree upon by all parties involved.
Lease restructuring is inevitable in the event of declining property value or if there exist huge and significant diaparity between market realities and existing rent. Restructuring of lease most time favour the tenant especially when suggested by the tenant. This depends on the tenant’s needs to either expand by persuading the property owner to make additional improvement or contract reducing amount of space and consiquently lowering rent on space occuppied during tough and difficult economy.
The provision of additional improvement gives structure or property a face lift thereby increasing the value of the property. Lease restructuring can’t be achieved without the knowledge, consent and contribution of the lender or financier, who will finance the restructuring and the lawyer that will restructure the aggreement by incorporating the new amendment agreed upon by all parties involved, that is the tenant, property owner and lender.
Property owners and tenants must have to deal with new clauses demanded by the lender for restructuring to take place. It must be emphasized that lease restructuring usually cost property owners a great deal due to costly tenant improvement, loss of cash flow and other issues he has to deal with.
These reasons and many more make it difficult convincing landlord to embark on lease restructuring. A smooth lease restructuring negotiation can only be achieved if the tenant consider these factors and how it affects the landlord. The truth is that most landlords have avoidance perspective to lease restructuring because of the losses they incurred when restructuring is in progress.
Tenants requesting lease restructuring must also consider the plight of the propert owner alongside their intentions. They should weigh the advantages and disadvantages side by side as it affects them and the property owner, tenants must endeavour to strike a balance so that it can be a win win situation for them and the property owner before making their intentions known to the property owner on lease restructuring negotiation. Tenants can also engage the services of a lawyer or an expert real estate lease negotiator to negotiate on their behalf in order to present their case more professionally.
The property owners are also answerable to their lenders in that the lenders have to make careful considerations to save guard their investment, they must be rest assured that their investment are legally secured before releasing fund for restructuring.
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