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Body Corporate Problems

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  • Body Corporate Problems

    We are negotiating a new lease with a tenant of our factory/office building.

    They wish to opt out of some of the Body Corporate charges (the lawnmowing and the sinking fund). It this
    legal?

    What action can we take? Is it a deal-breaker?

    Help please.

  • #2
    Anything can be negotiated in a commercial lease that is legal. The normal situation is for the tenant to pay all the costs. It comes down to the desirability of the location and the property. If you think you can easily re-let at normal rates then stick to your guns, and tell your prospects to take it or leave it.

    Without knowing the full details of the lease it is difficult to offer advice.

    Personally I would be reluctant to let them opt out of these charges. I would tell them I would engage the services of a registered valuer. The valuer works out the market gross rent and then takes off all the costs to arrive at the nett rent - this way the gross payments (including the nett rent and 100% of the costs) are no more than the gross market rate for an adjoining comparable property that has lower or no BC fees.

    Julian
    Gimme $20k. You will receive some well packaged generic advice that will put you on the road to riches beyond your wildest dreams ...yeah right!

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