When it comes to financial matters, most of us like to keep the detail close to our chests.

It’s often considered foolhardy to give too much information away about the workings of a business for a whole raft of reasons.

We become particularly risk averse, sometimes for good reason, to opening our books to anyone other than auditors and financiers.

However, as our financial world has been turned on its head in the past months, it is timely to look at the benefits of sharing more information about our businesses to increase the options for making better deals. After all, we are in this together and in the property lease sector, tenant and landlord alike are hunting for ways to ride things out and make the best of volatile economic conditions.

For instance, imagine a scenario where a retailer is struggling and wants to get a rent break or to negotiate a reduction or delay in rental payments to stay afloat. Many might simply go straight to a landlord and say, “Give us a break, we’re struggling.”

The landlord, lacking in powers of clairvoyance, has no way of knowing whether the tenant simply wants to maintain profitability at the expense of the landlord or is truly struggling.

It is not going to work to simply go to your landlord with your hand out and expect them to give something away. They need evidence.

A much better scenario is to share some solid information with the landlord, or an independent advocate or representative, about the state of the business and the efforts being made to deal with it.

I know of a brokerage in the United States that asks a tenant for bank statements, sales figures and tax returns going back 3 years so they can then present a case to a landlord seeking some flexibility in rental payments based on solid information about the tenant’s predicament.

So sharing the right information in the right way can ease the path to striking a deal that benefits both parties.

Here at Parallel Directions, we are well placed to represent a tenant’s interests in matters like this and advise on what sort of information is required to put together a good proposal to a landlord.

Tags: commercial property lease negotiation, lease negotiation, lease payments, Property Lease Negotiation, recession property strategies, rental payments

This entry was posted on Tuesday 24th March 2009 and is filed under Recession Strategies. Both comments and pings are currently closed.