We are looking to have a lease assigned to us for the next two years but the existing tenant is asking for a premium. The premises is empty and there is no goodwill in the property so why should we pay this?
2007-05-17 00:16:14 · 3 answers · asked by poo 2 in Business & Finance ➔ Renting & Real Estate
The lease premium could apply if the current passing rent is significantly below current market rental value, ie.
passing rent - £10,000 per annum
market rent - £15,000 per annum
The assignor could therefore apply a premium based on the benefit to the assignee of £5,000 per annum.
The 'valuation' model will present value the future benefit by a Present Value multiplier. There are no hard and fast rules but it depends on property type, demand etc.
You have to consider whether there is any real value in taking on the lease/rent and whether the assignor should receive any premium at all. Does the lease allow for it to be sold on at a premium?
2007-05-17 03:36:13 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Not knowing all the circumstances surrounding the situation, it's a bit difficult to answer. However, I would venture that the current tenant is simply looking to generate a profit over the current lease terms. As the legal tenant of the property with a binding lease, the current tenant has a committed monthly rental fee. Perhaps he thinks the property should lease for more now, given the price of rentals in the area.
Either way, if you want the property, you are basically stuck dealing with this tenant. He holds all the cards.
2007-05-17 00:29:59 · answer #2 · answered by acermill 7 · 1⤊ 0⤋
your question actully is hard
2007-05-17 00:22:01 · answer #3 · answered by mohammed muth. 1 · 0⤊ 1⤋