What is a relocation clause?
A relocation clause is part of the leasing document in which you, the tenant, agrees with the landlord's demands that if a more esteemed tenant comes along, the landlord should provide relocation support services from your current location and into a different location.
What makes them ‘esteemed’ and not you? It’s based on how soon and how much the individual is willing to rent out. Say you’re occupying the first floor of a building, and this individual comes along and is willing to lease both floors of the building for themselves, starting the next month, the landlord will more than likely take the offer due to getting more money very soon. If this happens, the landlord is then required to move you to a new location.
Usually if you’re signing a lease agreement the location you’re trying to rent out is in a shopping center or a space that includes industrial work such as packaging and assembly. Relocation Clauses are often used for commercial licenses.
Do I Have a Say in Where I Move?
Yes, you do!
If you have already tried your attempt at negotiating removing the relocation clause, you do have the ability to request what kind of requirements you will need for the move to work. This can be based on how much space you need, what amenities you will need as well. If the landlord finds you a new location, but needs improvement, it will fall under the landlord’s tasks to project planning and completion.
Another thing to keep in my mind is that you should set some ground rules when first negotiating your relocation clause. Set a time frame that you’ll need for relocation services in order to move out of your space and into the new space.
With a set requirement for a new space, if the landlord goes against the tenant’s request, the tenant is able to take legal action. The requirements are in a contract and the landlord can not go against the resident relocation request. You may also be entitled to compensation if your business has been impacted in any way. Plus, in the future, you could possibly even negotiate to take the relocation clause out in order to prevent any further moves.
What to Negotiate for my Provisions?
Limit the amount of times you have to move, specially only one move. If your lease is only for one year, your business may be affected by multiple moves. It may be difficult for returning clients to keep up with where the new location may be. Request a space limit. This way the landlord doesn’t move you to a smaller location then what you had before. If you miss out on a space request, you may risk cutting down on staff or equipment, and this could affect your business needs. Also ensure in the new space, if agreed, that the landlord makes the moderate rehabilitation requests that need to be made, such as any damages. This should be done prior to the move-in date.
Ask for moving time. Usually a relocation clause will give you a time frame of when you are required to move in. Ensure that you have enough time to relocate out of your previous location and into your new location within your time frame. The default time frame is usually about 90 days. If you think you’ll need more time, ask for it!
Communication is key when it comes to relocation. If you’re feeling stressed and you’re not coming to an agreement with your landlord, you should look into project based support services that will benefit you and aid you through your relocation process.