Commercial leases represent legally binding contracts between a business-related tenant and a landlord regarding property rental.
The agreement defines the rights and responsibilities of each of the participants during the tenant–landlord partnership. Commercial leases cover all business types ranging from big warehouses to office spaces.
They mostly make a standard lease of complex legal jargon. It complicates further contrary to residential leases as they vary from one lease to another based on whether they are for retail or commercial premises.
And other than including the occupied building space they also include the changes that you may make on the property such as
- Public facility usage and more
If you are a tenant, pay close attention to your particular circumstance prior to agreeing to a lease. Inexperienced tenants accept the first lease they are offered which is not appropriate.
So it is in your best interests that you have proper and complete understanding of the entire lease, the market and legal system in your locality.
The better and wiser practice is to have your lease reviewed by a professional lawyer. You will receive Retail lease advice related to unfair provisions in the agreement and negotiate changes with the landlord or the lawyer of the landlord.
Commercial lease specifics
Commercial leases are not just about drawing a lease agreement between the two parties (lessee and lessor). It involves several other factors such as
Retail lease act
Retail leases legislation acts are specifically made for all territories and states. The acts have specific rules related to matters like what makes up a retail premise.
The lease of a business situated in a shopping centre or a business that predominantly functions as retail business has it lease governed by the retail lease act of the relevant territory or state.
The Acts help in fair arrangement of retail leases and have integrate mechanisms that help resolve disputes between tenants and landlords.
Condition of the premise
A report on the condition of the premises is necessary before you sign a lease. The report helps provide information related to services, fittings and fixtures present in the premises. Retail lease laws require a disclosure statement given by a landlord.
Costs involved in a lease
On-going rent is not the sole expenditure to consider in a lease. Consider various other costs such as
- Insurance cost
- Security bonds
- Legal costs
- Maintenance and repair cost
- End of lease adjustments
Thus it is important to receive proper legal advice prior to signing a lease. For instance, most state legislations related to retail leases do not allow inclusion of preparation of lease cost in the agreement. But this does not apply for commercial leases.
Important factors to know while signing a commercial lease
It is vital for a tenant to do a thorough research in relation to the lease, property & business and make the inquiries prior to making a commitment.
Tenants should follow this before leasing, buying, taking on a lease assignment or incur other such responsibilities.
Some important considerations include
- Duration of a commercial lease
- Presence of option period, as a financier will not be ready to lend money for a period that exceeds what it states in a lease.
- Outgoing payments is not the responsibility of a lessee. In case of retail lease, the landlord should detail the outgoing costs the tenant has to bear in the agreement before signing the lease.
We can assist you quickly and effectively
Melbourne Commercial lawyers are experts in Commercial leases. Our expert commercial lease lawyers’ team deliver best results at competitive prices. We assist in a commercial lease transfer too.
As it is not possible for your lease to transfer automatically to a new owner when you sell your business, our commercial lease lawyers provide all the help related to rent and other duties until formal lease transfer is complete.