Page 59 - Thirst Magazine Issue No. 3 Coffee & Tea

MY ADVICE IS, DON’T SKIMP ON LEGAL COSTS TO APPOINT
A SOLICITOR TO READ THE FINE PRINT, AS FAILURE TO DO

SO MAY COME WITH COSTLY CONSEQUENCES.

SECURITY DEPOSIT EARLY TERMINATION

Prepare 3 – 6 months rental for deposit While no one can foresee how long a business would
last, it is paramount that an entrepreneur also prepares
It is the norm in Klang Valley for landlords to require himself/herself for the worst case scenario. Hence, it
three to six months rental deposit in addition to one is always wise to factor in the duration of the business
month advance rental payment and another half to one premises’ tenancy before entering into any tenancy
month rental as utilities deposit before any keys to the agreement. Some landlords in the affluent areas such as
premises would be handed over to the tenant. The reason Bukit Bintang, Damansara Heights, Bandar Utama and
for this is because some landlords depend on the monthly Bangsar areas tend to demand a mandatory tenancy
rental for their mortgage repayment of these premises. term of two years with an additional two years as
Any late payment of rental or default would greatly option upon renewal. Early termination of the tenancy
jeopardize their repayment and risk themselves being may result in having to cough up the rental for the
caught in a financial recovery exercise by their financiers. remaining period of the tenancy term.
Furthermore, the three to six months rental deposits Vice versa, prospective tenants should always look
may also serve as cushion to some of the landlords’ out for terms in the tenancy agreement that stipulate
financial strain for certain inadvertent events, for any early termination of the tenancy unilaterally
example eviction of the tenants for various reasons, and by the landlords, for whatever reason, which would
making good of the premises after eviction or at the end automatically entitle you to damages as a result.
of the rental period.
However, as tenants, you are always advised to take OTHER FINE PRINT
detailed photographs of the exterior and interior of the Most people may have the wrong assumption that
premises when you are first handed the keys. This is tenancy for commercial premises is similar to that
to ensure that you and the landlord take note of any for residential premises, especially when it comes to
pre-existing conditions of the property before rental premises located within a shopping mall. My advice is,
commences, that you have references to restore the don’t skimp on legal costs to appoint a solicitor to read
premises back to its original or to an agreed upon state the fine print, as failure to do so may come with costly
at the end of the tenancy, and have your rental and/or consequences. For instance, premises located within
renovation deposit fully refunded back to you. Berjaya Times Square and Pavilion Kuala Lumpur may
RENTAL require you to be open for business all year round except
for the very few days of public holidays. Failure to do
Then the actual rental money, but also so may incur hefty fines/penalties for each and every
some freebies. day that your business is closed. Others may find terms
such as compulsory renovation of the rented premises in
With new commercial buildings coming up like cherry every 3 to 5 years (factor to be taken into consideration
blossoms in spring season, some of the landlords for when it comes to tenancy renewal), in order for the mall
these buildings may be offering three to six months to continue to remain fresh and relevant to the ever
rental free period to capture tenants. These are deals changing customer expectations and trends. These are all
worth exploring as the rental free period may serve additional hidden costs that some may overlook.
as a cost saving element with the normal estimated
renovation period of one to three months before BE SMART
a restaurant or bistro is delivered and operational. The conclusion is be smart when you are dealing with
Online websites like Property Guru and iProperty commercial tenancy. Always compare prices and terms
are good tools as these websites offer the latest rental of the prospective tenancy for several units within the
prices for similar properties within the vicinity same vicinity before deciding on one. Engage a solicitor,
of your targeted area before you commence any when necessary, to negotiate with the prospective
negotiation with the landlord. Other factors in landlords for better deals on your behalf should you
negotiating for better rental includes location of the find it difficult to do so via the estate agents.
premises, age, how well maintained it is, accessibility You can get in touch with Bernard Liew
by the public, the availability of car parks for staff and at kinjong.co@gmail.com
potential customers, etc.

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