Are you a Lessee?
If you are interested in becoming a tenant (lessee) under a commercial lease, it is important not to rush things. There is much to consider and several sequential steps to follow.
First, obtain a written offer from the landlord or the landlord’s agent to lease the property. Ensure that the offer, if accepted, is conditional upon your satisfaction with the terms of the lease document, as advised by your Commercial Leasing Lawyer. Never sign a lease document without their advice.
Key Considerations
1. Due Diligence: Your Commercial Leasing Lawyer will not advise you on financial matters, town planning, contamination, building laws, the “pest and building” status of the property, or the suitability of the premises for your intended use. Obtain independent advice on these aspects before committing to the lease.
2. Lease Document: The lease specifies the rights and obligations of both the landlord and you as the lessee, including financial and non-financial responsibilities. Request a written review and summary of the lease document from your Commercial Leasing Lawyer before signing it, as you may wish to request changes.
3. Negotiation Points: Typical negotiation points include the initial term of the lease, options to extend, initial rental, subsequent rent reviews, contributions to outgoings, specific charges, and car parking.
4. Security and Insurance: Usually, a security deposit or bank guarantee (often equivalent to three months’ rent) is required, along with public liability and other insurances. The lessee may also be responsible for the lessor’s legal costs, except for Retail Shop Leases.
5. Maintenance and Repairs: Leases often obligate the lessee to maintain and repair the premises, repaint at intervals, avoid alterations without landlord approval, and restore the premises upon lease termination.
6. Events of Default: The lease will specify what constitutes an event of default by the lessee. These provisions should be carefully read and understood. It is advisable that lease documents contain a dispute resolution clause to prevent the landlord from immediately terminating the lease in case of a dispute.
7. Financial Review: Your Commercial Leasing Lawyer should recommend taking their review to your accountant to consider the accounting and tax implications for your business and personal affairs. Do not sign the lease until this has been done to your satisfaction.
Contact Us!
Ensure your commercial lease is thoroughly reviewed and tailored to your needs. Contact Jim Wilson, an experienced Commercial Leasing Lawyer, for expert advice and assistance. Call 0415 645121 to discuss your lease requirements today.