If you’re a landlord, one of your biggest concerns is how you can get potential tenants to sign a Lease Agreement with you. 

Luckily, there is a common incentive used for this purpose – rent abatement. 

Rent abatement is a great way to incentivise current or future tenants to sign a Lease Agreement with you. It essentially involves you offering a lower payment for the tenant, and in return, the Lease Agreement lasts longer. 

If you are a landlord offering a rent abatement deal, you are in a position to warrant benefits both for yourself and your tenants. 

However, it’s important to get any agreements drafted in writing by a legal professional so all parties are aware of their specific rights and responsibilities. In this article, we’ll cover the details of a Rent Abatement Agreement and how it can help your lease. 

What Is Rent Abatement? 

Rent abatement is an offer made by the landlord to the tenant. 

Put simply, it involves the tenants paying less for rent, in exchange for the guarantee of a longer lease period. So, it benefits both the landlord and the tenant. 

It doesn’t matter if we’re talking about residential or commercial properties. Rent abatement can be used for both types of leases. However, rent abatement is common in commercial leases as businesses tend to be interested in longer rental periods. 

Thus, offering incentive for longer stays can secure stability for landlords and save tenants some cash. 

There are two ways rent abatement can be practised – we’ve described these below. 

No Pay Period

This is a period where no money is owed to the landlord, usually at the beginning of the rental agreement. 

This is commonly used for commercial agreements where the no pay period gives the business time to set up and start earning profits prior to paying rent. 

Rental Decrease

A decrease in rent promises that when a tenant rents a space for a long period of time, the amount will decrease, minimising the amount of rent they pay altogether. 

There is no uniform practice when it comes to rent abatement, as the specifics of the agreement will depend largely on the parties involved. Therefore, it’s always important to document any agreements.  

Why Do I Need A Rent Abatement Agreement? 

Once you have negotiated terms for the rent abatement that suit both you and your tenants, getting it in writing is a crucial next step. Having it all in writing can ensure all parties are clear on any terms and expectations in order to avoid a potential misunderstanding. 

In the event that a disagreement does occur regarding the terms of the lease, having a document to refer back to can avoid unnecessary legal expenses resulting from a dispute. 

What Does A Rent Abatement Agreement Look Like?  

A Rent Abatement Agreement is always tailored to the needs of the individual or organisations involved. Typically, the agreement will include: 

  • The agreed upon terms for all the relevant parties in the lease 
  • General details, such as information on the property, contact details of the signees and the length of the agreement
  • Processes regarding what happens in case of a dispute or if the lease is terminated early
  • The amount by which the price is lowered 
  • Details of the no pay period

Overall, a Rent Abatement Agreement aims to ensure the interest of all parties are protected. As a landlord, it’s important to ensure the agreement works fairly for everyone involved. 

Getting a legal professional to draft this agreement is imperative. It is important that everything is addressed clearly, concisely and leaving no room for ambiguity or misunderstandings. 

This is because you  want this to be a long term agreement and a smooth sailing relationship with your tenants. 

Need Help? 

If you would like to offer rent abatement to your tenants but don’t have an agreement, our lawyers are happy to draw one up for you. This way, we can ensure the specific needs of your business are met. 

At Sprintlaw, we offer a Rent Abatement Package that includes everything you will need to secure rent abatement deals with your tenants. 

Our expert lawyers can also help you business with the following: 

If you would like a consultation on rent abatement agreements, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

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