Moving into the space they have signed for without carrying out a thorough incoming inspection is one of the most common mistakes made by tenants renting commercial property.
Leon Breytenbach, national manager of Rawson Commercial, says inspections of this kind by the landlord and the tenant form part of the lease agreement, but it is surprising how frequently they are done inadequately.
"It is perfectly understandable that today's entrepreneurs are in a hurry to get established and to keep their businesses moving ahead. However, the consequences of not properly inspecting the property before the tenant moves in can be very serious indeed and can often lead to ongoing disputes between the tenant and the landlord," adds Breytenbach.
Most of the complaints that are made after the tenant has taken occupation relate to the condition of the roof, the floor or the air conditioning - and in almost every case it later becomes evident that these matters were not checked on thoroughly at the incoming inspection.
Unsatisfactory items
"In carrying out a thorough initial inspection it is essential to cover every part and aspect of the building, with particular emphasis being placed on unsatisfactory items. Furthermore, the water and electricity meters should be included in the survey so that the readings that are given at the time of occupation cannot be disputed later," says Breytenbach.
With complete records of this kind in place, the tenant and landlord are less likely to disagree seriously on such issues as how much wear and tear has taken place in the building during the lease period. Such records cannot be too detailed and it is particularly important to emphasise the value of a thorough photographic survey covering every item, no matter how insignificant it may seem at the time.
Once such an inspection has been completed, copies of it should be signed by the tenant, the landlord and an independent third party. These copies should then be retained by all of the above for later consultation if disagreement arises. However, it is generally accepted that seven days should be allowed after the tenant has taken occupation so that he can add to the defects list any item that has now become apparent which was not originally covered by the survey.
With records like this completed and filed, the outgoing inspection is unlikely to result in serious disagreements and the termination of the lease can be a simple, uncomplicated process.
