Please Rotate Your Device
Don't fall too much in love with your space. The landlord's right to relocate tenants probably exists in your commercial lease and all other leases in the building.
The good news is that this relocation right they have will usually only be triggered if the landlord is trying to accommodate an expanding tenant in the building and can only be done if they have other, comparable space to relocate you to.
Let's look at a sample lease clause and point out what should be modified and what is missing:
The Landlord shall have the right to relocate the Leased Premises to another location of approximately the same size on the Property as the Landlord, acting reasonably, deems equivalent to the present location.
?Approximately the same size? ? what is the definition of this?
What if the landlord thinks an increase of 20% in the size is ?approximately??
It would be beneficial to insert a percentage increase or decrease.
What is the definition of ?Property? ? why is it not called ?Building?? In some cases the definition of Property or Building can include other buildings the landlord owns. Check the definitions section of your lease.
It would also be favorable if the space you are relocated to is larger than your current space, but that you still only pay on the square footage you originally signed on for.
For example, this would be an improvement for you:
"If the square footage of the Relocation Premises exceeds the Premises, the Tenant shall only pay rent on the Rentable Area of the Premises for the balance of the Lease Term. For further clarity, if the Tenant shall not pay any more in Annual Gross Rent on the Relocation Premises than it currently pays on the existing Premises."
The clause above went on to read:
If the Landlord elects to move the Leased Premises, it will pay all costs of constructing the new premises to the same standard as the existing Leased Premises including, without limitation, the reasonable cost of moving the Tenant's property and equipment and reinstalling them in the new location. The Landlord shall not be responsible for any loss or damage occasioned to the Tenant by such move, or for any indirect or consequential costs.
Is there anything special about your space you would like to point out that makes it clear how expensive it may be for the landlord?
What about soft costs like business cards and stationery?
What if you have amazing views? It would be beneficial to be no lower than floor "X".
Perhaps you enjoy walk-off elevator exposure, or you want to face a certain direction. You can ask that the Relocation Premises must have a south facing orientation.
What if you are a retail tenant? Being relocated to an inferior part of a mall is a total game changer. In this case (and in the case of large office tenants with leverage) - try to remove this clause altogether.
There are no standard rules on this clause. Basically any right or privilege you currently have, or want to have, can be negotiable. For instance, most landlord relocation rights state that the landlord will build out the new space, but you could also negotiate a tenant inducement allowance and complete the work yourself.
Most tenants are not even aware that landlords have the right to relocate them during the lease term. While there can be benefits such as getting brand new space, a relocation can also be disruptive and costly. The rules of the game should be negotiated long before the lease is signed.
Still stuck? Consider a review of your commercial lease to get unstuck.
Follow up reading: how loose wording in a lease allowed a landlord to relocate a tenant and the tenant ended up paying 33% more rent: click here.