My 2 cents - all of the above sounds normal except not indicating who pays the Gov't fees etc. They should be stated - normally stated in the information you got from your agent. In fact, getting 12+12 for a commercial property is a great deal! We had to agree 3 years fixed on our last move.
How extensive are your renovations? I think 3 weeks is too short. You should also ask about whether you can chose your reno company or if you have to use the contractors determined by the management company of the office because often (at least for fire services, water and electricals) you have to use their people (who are normally more expensive in my experience than others!).
Other items to check (you probably already have) .... who provides the floor and ceiling; is the building 24 hour access; do you have to pay extra for air-conditioning (and check again if you have to pay extra at weekends).
Our first choice of apartment in HK - the landlord refused to carry out any renovations (even a broken toilet seat as "it would be cheap and easy for the tenant to do") AND they wanted 3 months' rent deposit and 1 month up front. We didn't take them up on it. This was Chinachem by the way, not some hard-up landlord.
Edit: was also unfurnished. We asked what kind of damage would warrant taking over 100k as a deposit - no answer naturally!
Last edited by Satay Sue; 22-11-2012 at 08:43 AM.
I appreciate your point and I'm aware its a short lease and a small business, however the OP has come on this forum to ask for 'good advice' and that he is new to it all, nothing we write here can trump that of a professional.
The transaction is still under negotiation so cant think of a good reason why any Landlord would play hardball and not try to negotiate a deal as its not in his interest to see the deal fall through. Notwithstanding this, i think its in the OP's interest to see a lawyer to protect his interests in the deal so he is aware of everything that is in the LL 'standard contract' and where he stands should things go tits up!
Usually, if the tenant "drops out", meaning does not go through with the agreement, he forfeits his deposit - usually the sum paid upon signing the preliminary agreement. If the landlord "drops out" the usual agreements will state that the landlord will need to return the deposit the tenant paid, AND the landlord will need to pay the tenant a sum equivalent to the deposit paid by the tenant.
If there is anything agreed between the parties and this is not set out in the Prelim Agmt, write in on the Agreement that will be signed by both parties. The Prelim Agmt is a contract, and do not believe you can rely on what the agent told you to bind the Landlord.Should there be anything in the preliminary agreement about air cons, wooden flooring, lighting fixtures etc...?
Fantastic advice here so far!
It's quite a daunting process for us as there's a lot of financial commitment upfront.
The office space is not complete bare shell. But the washroom and pantry are in very poor condition and may need full renovation.
The floor isn't that great either and may need retiling or carpeting.
All this, if done, won't cost too much!
It at least needs to be thoroughly cleaned out.
Will have to view the premises again to see what renovations needs to be done.
There are a lot of wall cabinets already.
We did mention a need to do quite a bit of renovation.
Perhaps that is why the LL wanted us to pay 3 months deposit to start with then.
Thanks for the advice to take pictures.
When we first viewed the premises it was only for about 5-10 minutes.
We will check the premises again and take more pictures. During the 1st visit, we only took a few pictures to get general idea of size and rooms rather than specific things like windows or air cons.
All the curtains were closed during the first viewing, so will check the windows during next viewing for scratches etc...
Will also check for other defects.
Will also ask current tenants (who haven't moved out yet) if they've had any problems with the premises or LL.
Thanks also for the advice on stating in what the condition the premises need to be delivered. Especially when we may be doing quite a bit of renovation. Although seems unfair for the LL to deduct deposit for renovating or renewing the current state it's in.
Will try get that into the contract.
Am I right to say then that all the terms and conditions that need to be agreed on the Final Contract should be on the Preliminary Contract too?
It concerns us that the Preliminary Contract we got is only on 1 page without all the details.