QUOTE(czn @ May 9 2014, 09:25 PM)
Hi, I am new in shop renting business and I just bought a new shop to rent to tenants. The prospect tenant says he is going to lay tiles, put up grills and lightings. He asks me to bear some of the costs besides giving free one month tenancy. What is the normal practice in shop renting business regarding renovation cost sharing? Some say the ground floor tenant will pay 2/3 of the Indah Water bill, is that true? Can the experienced sifus here give me some advice? Thanks a lot.
Landlord: Nah, I don't need the tiles and grills. If you want to renovate, please make sure you return the shop in the original condition when you leave.
Tenant: But the tiles and grills will be useful for your next tenants.
Landlord: Don't know yet. He might want me to PAY to have them removed. Let me see what you plan to do. See if it's neat and good for other tenants.
.... after looking ...
Tenant: See, this will improve the value of the shop. You can rent at a higher price to the next tenant.
Landlord: How much do you think it'll be worth? I'm renting to you now for RM5000, do you think the improvements will increase the value to RM6000?
Tenant: For sure. Even RM7000 might be possible.
Landlord: OK, I'll pay for the tiles and grills. But your rental goes up to RM6000. OK?
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half to one month, rent free renovation period is quite common.
2/3rd of Indah Water bill for ground floor tenant, I've never heard of. Why not just share equally with however many floors/tenants there are? Most businesses will use very little water. Unless the ground floor tenant is a laundromat using so much water that it raises the Indah Water bill for everyone, I don't see any reason why the ground floor tenant should bear a greater share of the indah water bill.