As the expiry date of a lease approaches, landlords, their
commercial managers and tenants will be considering the
renegotiation and renewal of their tenancy arrangements.
Being a successful negotiator is a valuable asset in any
property transaction. How you negotiate can make a significant
difference to the outcome, even if you start from a weaker
While there is no substitute for negotiation experience or
practice, this article is intended to provide you with some
practical tips for the next time you are required to negotiate a
There are a range of negotiation strategies and tactics,
including 'principled' or 'interest-based'
negotiation (sometimes called win-win negotiation). The Harvard
Program on Negotiation is an effective 'principled'
negotiation strategy that you can use to improve your negotiation
power. It involves a set of techniques which focus on the
underlying interests of the parties, rather than haggling over
arbitrary starting positions.
The strategy is based on four key pillars as listed below:
separating the people from the problem
focusing on interests, not positions
generating a variety of options before deciding what to do
insisting that the result be based on some objective
No matter how skilful you are, there is a limit to what can be
practically achieved in some negotiations. You can reasonably
expect a successful negotiation when you make the other side an
offer that is more attractive than their 'Best Alternative to a
Negotiated Agreement' (BATNA or walk-away
alternative). Otherwise, there may not be much point in entering
There are many methods of enhancing your negotiating power,
developing a good working relationship with the people you are
understanding each side's interests
developing creative options
carefully considering and committing to what you will and will
not do in the negotiation
clarifying what you want the other side to do.
However one of the most effective ways to increase your
negotiating power is to improve your walk-away alternative, reduce
the other side's walk-away alternative, or preferably both. A
strong BATNA on your side (or a weak BATNA on the other side) may
persuade the other party to make or accept an offer, irrespective
of their relative bargaining power and position.
The art of improving your BATNA (and reducing the other
side's BATNA) requires thorough preparation, working through
the four pillars identified in the Harvard Program. Below are some
practical tips and common mistakes:
Identify interests, concerns, goals and priorities
Including the wrong people in the negotiations
Be clear on what you need and what can be discarded
Inadequate preparation as to facts, interests, doubts and
options if negotiations are unsuccessful
Search for, and continually restate, areas of agreement and
record the agreement in writing
Acting upon assumptions and failing to listen effectively
Begin politely, with clear words – the first response
sets the tone
Making offers too quickly – the right offer at the wrong
time is the wrong offer
Identify backdoor channels, if formal channels of negotiation
are slow or break down
Fixing upon and defending a single position and failing to list
and evaluate alternatives
Identify negotiation strategies and tactics that are being
employed against you.
Failing to disclose helpful information to the other party,
especially your concerns.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Whilst option to purchase clauses are more in commercial properties, they are now being included in residential leases.
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