It is also important because a tenant remains bound by the conditions of the agreement, even if it has moved out and assigned the lease to someone else. On the subject of rent, prospective tenants should check the terms of ratchet clauses and operating costs. Although automatic rent increases are less common, many agreements still at least maintain the initial rent and tenants should ensure the sum being asked is no more than the fair market rental. If ratchet clauses are deleted, there needs to be a clear statement that both parties can initiate a rent review. In some cases, landlords with sole right to review rents on a property without a ratchet clause have declined to do so when market rates have fallen, leaving the tenant to pay high rents.
Most landlords also ask for a contribution to operating costs such as rates and insurance.
Tenants should ask for the list of outgoings to be closely defined and detailed. This is important given many real estate agents' leasing forms provide for a non-exclusive list. A key point for prospective tenants to remember is that, once a lease is signed, a tenant is locked into obligations for many years. Friendly pre-agreement negotiations often become much less so once the ink has dried. The time to sort out any problems is before anything is signed and obtaining early legal and valuation advice can pay dividends later.