Commercial / Retail Shop Leasing
Leasing business premises
Most businesses operate from leased premises. If you own premises which you intend to lease to a tenant or are about to lease premises for your business or renew your current lease, it is important you talk to us before signing anything.
The leasing process
Having inspected the premises, the letting agent acting for the landlord will hand you a letter of offer or letter of intention for you to sign. Be careful not to rely on verbal statements made by the landlord, their solicitors, or letting agent. If you are interested in leasing the premises, let us know.
The lease is a written contract containing all the rights and responsibilities of both the landlord (lessor) and tenant (lessee) for occupation of business premises.
Avoid word of mouth agreements to rent business premises as they tend to be uncertain and difficult to enforce. A dispute about the terms of a lease is costly and time consuming for both the landlord and tenant. A written lease should be entered into.
The format of leases varies but all should clearly set out the commercial terms of occupation of the business premises. The objective is to minimise future disputes about the terms of the lease.
The Retail Shop Leases Act 1994 sets out the law governing leases of premises which are part of a retail shopping centre or used for the purposes of a retail business. If your business premises fall within the Act, then various disclosure statements are required to be given by both the landlord and tenant to each other.
Failure to give these disclosure statements could allow legal rights to terminate the lease. This usually means a costly dispute which could have been avoided with legal advice before signing any lease documents.
Terms of the lease
The terms of commercial leases are negotiable so it is important to consider the commercial obligations you intend to agree to before signing any lease documents. Consider the following:-
- The initial rent for the first year and the method of increasing the rent each year;
- The ability to transfer or assign the lease if you decide to sell the business, and the expense of doing so;
- The possibility of subletting the premises;
- Whether local town planning laws allow the business to operate in the premises;
- Your rights to end the lease if the premises are damaged or destroyed;
- The length of the lease and right to renew it by exercising options;
- keeping the premises in good repair;
- rates and taxes;
- outgoings and other charges;
- all the additions, improvements, and fixtures made during the lease;
- insurance and what types are required;
- restrictions on the removal of fixtures and fittings;
- obligations to remove partitions and reinstate the premises after expiry of the lease;
- the consequences of failing to pay rent;
- your right to end the lease before it expires;
- ways of resolving any disputes;
- whether the Retail Shop Leases Act 1994 applies to your lease and what that means;
- special obligations under a shopping centre lease;
- payment of a security deposit and the terms of personal guarantees
Securing your interests
Apart from negotiating the best possible terms for you we will:-
- ensure the lease reflects the commercial terms agreed to;
- establish whether a mortgagee’s consent to the lease is needed;
- ensure there is clear title;
- ensure you comply with your obligations under the Retail Shop Leases Act 1994;
- advise you on your obligations under the lease;
- advise you on your responsibilities under the body corporate rules, if the premises are strata titled;
- advise you of the effect of easements or other competing interests;
- arrange for the lease to be registered (if required) on the title for the premises.
Be aware that tenants must pay State and Local Government charges. These include lease registration fees, mortgagee consent fees, survey fees, and sketch plan examination fees.
Our service to you
We appreciate the importance of your personal affairs. Throughout our relationship you will receive expert guidance to assist you in your decisions. Our experienced team will be responsible for preparing any documents relevant to your transaction and will meet you personally to discuss your wishes.
We guarantee professionalism, personal service and knowledge. If you are not 100% satisfied with the quality of our service, we will do whatever is necessary to achieve your satisfaction.
Where to from here?
Contact us to find out how we can assist you.