Commercial premises can be anything from an office suite, a shop, a hotel, a farm, vacant land or a factory.There is no restriction on the contents of a Commercial Lease. A Commercial/Retail Lease needs to address current issues and it also needs to contemplate contingencies or new issues which may develop in the future. Following is a Commercial/Retail Lease checklist:
-
What are the premises? Do they include car spaces, plant and equipment and any fixtures and fittings?
-
Are there any parties other than the landlord and tenant who need to be involved with the Lease?
-
Does the mortgagee need to consent to the Lease?
-
What is the length of time of the Lease?
-
Is the tenant to be given an option?
-
Are there any circumstances when the term of the Lease could be reduced, e.g. the premises were destroyed?
-
What is the rent, when is it to be paid and how is it to be paid?
-
When is the rent to be reviewed and how is it to be reviewed?
-
What other expenses or payments are to be made by the tenant?
-
Is the tenant to reimburse the landlord for outgoings, cleaning charges and GST?
-
In what circumstances is the tenant able to assign the Lease or sublease the premises?
-
What are the obligations of the tenant in relation to repair and maintenance of the premises and when must the tenant redecorate the premises?
-
What items are to be insured by the tenant?
-
Is the tenant able to use the premises for any purpose or should the permitted use of the premises be restricted?
Signing a commercial/retail lease is a large financial commitment so before you sign anything make sure you completely understand and agree with the clauses in the lease. It is advisable to also get good financial and legal advice before signing a retail lease.
