Water Cooler - Lease Renewals & Payment Terms
I'm Jim Mcfarlane from Konica Minolta. I'm currently setting up a rental agreement for a water cooler for one (1) of our branches.
The Rental Agreement states: that upon lease renewal the vendor can increase the rent up to 5%. Q: What kind of terms have you negotiated for lease renewal increases? Is there a benchmark or best practice for this type of percentage increase?
Also in the Agreement is a part stating "if payments are more than 10 days late, we will have to pay a late fee of 5% or $5.00 whichever is greater." Q: What kind of payment terms are the norm. What terms have you negotiated?
Please let me know your thoughts.
Jim Mcfarlane C.P.M.
Jim, I never (well, almost never) agree to an auto renew clause in our contracts; it leaves you with no wiggle room at all. I add a clause that states that any renewal must be agreed to in writing by both parties. That gives you room to negotiate based on current issues. We have water service in all of our branch banks and we don't pay an annual increase.
Most contracts include late payment fee clauses such as the one you've received. It has been my experience that most suppliers don't enforce that. They understand that you have options to go elsewhere and would rather keep your business.
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