A commercial lease is a legal document that sets out the rights between the owner(s) of a commercial property (landlord/lessor) and another party (tenant/lessee), that have agreed to occupy property. A lease is a legally binding contract and can be complex and difficult to comprehend. It is essential that you understand all of the terms of the lease as it can contain commitments for many years to come.

It is important that you understand all of your rights and obligations contained in the lease in order to avoid timely and costly disputes in the future. You should have a full understanding that an offer to lease has legally binding obligations and legal advice should be sought prior to making an offer to lease, negotiating the terms of the lease, executing an assignment, paying a deposit or occupying the premises. In an addition to legal advice you also should seek financial advice to ensure that you can meet the financial obligations that come with the commencement or the continuation of a business with a lease.

Prior to executing a lease you should:

Consider your leasing needs

• is the space sufficient or too much for your needs?
• will the space allow your business to grow?
• can you assign the lease if needed?
• will there be a return on the investment needed?
• will your business generate income to pay the lease?

Inspect the premises

• inspect the space to ensure it meets your needs; and
• inspect the surrounding area

Obtain lease documents

• expression of interest documents;
• draft lease;
• supplementary lease documents; and
• fitout documents

Obtain legal and financial advice

• disclose expectations to legal advisor and accountant;
• disclose any representations made by agents; and
• discuss any issues or requirements you have with the lease

Negotiate the terms of the lease

• consider terms you can and cannot live without;
• which terms are essential and non-negotiable;
• concede on the terms that do not affect your business; and
• consult with your lawyer

Finalise lease documents

• execute lease; and
• pay deposit

If you would like to discuss entering into a commercial lease, please contact Emily to see if we can assist you.

The content of this article is intended in the nature of general information, and cannot be relied upon as legal advice. You should seek specialist advice about your particular circumstances.