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Rent-Free Fitting-Out Period & How It Works

Rent-Free Fitting-Out Period & How It Works

When it comes to industrial and commercial properties, you may sometimes see the term rent-free fitting-out period. However, you may note that it may not be applicable to all leases especially for fitted industrial spaces which do not much require renovation works.

Rent-Free Period

Usually for industrial spaces which are in bare or original condition, a rent-free fitting out period may be considered by the landlord or owner for a mutually agreed period of time where no rent is payable during this period. The rent-free period usually comes before the commencement of the lease.

For Fitting Out The Premises

The rent-free fitting-out period is usually meant for the tenant to conduct fitting-out or renovation works to the premises based on the tenant’s preference and renovation requirements subject to the relevant rules & regulations. For some companies, corporate image may also be important as they may be expecting visitors or customers on a regular basis.

Usually For Units Which Require Renovation

The rent-free fitting-out period is usually meant for bare or partially bare industrial spaces such as warehouses or factories that require fitting-out or renovation works. Fitting-out works are usually required as the landlord or owner usually requires the outgoing tenants to reinstate to bare or original condition at the end of each lease or tenancy. You may also note that a refundable fitting-out deposit may be required by the building’s management or the landlord before the commencement of fitting out works.

While fitting-out bare units may require some time and effort, it may also be a good thing as the tenant has the flexibility and is able to design the space as per their own specific requirements and according to the tenant’s needs so that the tenant will not be wasting any space which is available within the premises. In this way, the tenant will also not be paying for unnecessary spaces which are not used or can’t be used.