Toronto Office Relocation Primer
As businesses grow, corporate culture changes, and an organization’s needs change, office spaces that were once perfect no longer fit. If your current space doesn’t offer the opportunity for growth or renovations to improve the space into what you need, an office relocation will be necessary.
If you are considering an office relocation, the first thing you need to do is review your current lease. With the length of leases over many years, it is easy to forget the contractual obligations you originally agreed upon that will affect the timing and cost of your relocation. When you are reviewing your lease, consider the following:
Lease Expiration Date
Before approaching your landlord, make sure you have the correct lease expiration date, which is a commonly forgotten date as years go by, despite its importance. The exact date is important to know as it will directly impact the timing of your search and office relocation process.
Directly related to confirming your lease expiration date is the holdover penalty that may require a tenant to pay damages if you remain in the space after the lease expires. Damages can be up to twice the usual rent cost, which could lead to a costly error.
Confirm your obligations regarding the maintenance or demolition of your current space. Do you have to restore the space to its original condition? If so, be sure to factor the cost and time of this into your relocation to avoid unexpected delays and expenses.
An extension option will protect you from having your space leased out from under you if you are considering staying in your current space. Tenants are usually required to extend a “fair market value” for the space and provide notice to exercise this option, which is often significant.
Landlord Requirements to Provide Notice & Minimize Disruption to Business
The tenant is not the only one who has contractual obligations as the lease expiration date approaches. When your expiry date is near, your landlord will begin to actively market your space, possibly giving tours through your space to find a new tenant. As long as you are in that space, you have the right to keep your business running smoothly, so be sure to review lease provisions that require the landlord to provide ample notice and minimize disruption to your day-to-day activities.
As evidenced above, office relocation is complicated before you even begin to look for a new space. By retaining a tenant representation team early, you can rest assured that you will be safe from any mistakes that could harm your search for the right office space in the GTA and your negotiation process.