area of practice

Leasing

Commercial or residential, we make the leasing process clear and straightforward from start to finish.

Leasing a property or commercial premises can be complex and generally involves significant financial outlay. It is important to have a knowledgeable adviser to assist you in navigating this area of law. Whether you are a landlord or tenant, C J Boyd Solicitors can assist with residential, retail, and commercial leasing to ensure that your rights are protected and that all your obligations are clearly and concisely explained to you.

Commercial and Retail Leasing

A commercial lease governs the relationship between a landlord (lessor) and tenant (lessee) regarding the lessee’s right to occupy and run a business from premises owned by the lessor. Commercial premises may include office space, warehouses, industrial sites, shops, and retail outlets.

Retail leases are commercial leases that are regulated by specific legislation which typically applies to premises within shopping centres or that are used wholly or predominantly for conducting a retail business. There are certain exceptions, and a lawyer can advise whether your proposed leasing arrangements fall under the definition of retail. The legislation sets out certain provisions and prohibitions aimed at protecting the rights of retail tenants and imposes disclosure obligations upon a lessor.

Role of your Legal Advisor

Leasing disputes generally arise because of poorly drafted or ambiguous lease agreements, or because the parties do not properly understand their rights and responsibilities under the lease.

If you are entering a commercial lease agreement, you need to ensure that you understand the proposed provisions and that they are suited to your needs. We can review the lease, explain its terms, and highlight any potential issues or areas that might be negotiated in your favour.

We can assist with:

Preparing lease documentation
Reviewing lease documentation and advising and negotiating terms
Registration of leases at Land Registry Services
Leasing disputes arising from a default or termination
Understanding “make good” obligations
Assigning or transferring a commercial lease

Key terms in a commercial lease agreement

Although not exhaustive, following are some typical lease terms that should be carefully considered.

Description – the lease should include the correct legal title and a physical description of the leased premises as well as a plan that identifies the area and use of car spaces, storage facilities, common areas or amenities, etc.

Term – the lease term should reflect the lessee’s operational plans for the business. Options to renew are ideal for lessees looking for longevity of tenure and option periods (the period within which notice must be given to renew a lease) must be carefully noted.

Permitted use – the lease should state the permitted use of the premises and lessees should ensure that the proposed use complies with any council or other requirements and any necessary licences are obtained.

Outgoings – the lease should set out how outgoings are managed – who must pay for what and in what proportion. Outgoings include utility services, repairs and maintenance, rates and taxes, cleaning, and security. In retail leases, recovery of certain outgoings may be prohibited or limited.

Rent and rent reviews – rent review methods may be by increases in the Consumer Price Index, market review or a set percentage on each anniversary of the lease. Most lessors will require lessees to pay rent in advance and provide a security bond or bank guarantee to ensure compliance with their obligations under the lease.

Fitout and refurbishment – any agreement made for fitting out the premises should be clearly stated in the lease. It should include the types of fixtures and fittings to be installed, who is responsible to carry out and pay for the work, whether a rent-free period is allowed while work is carried out, and the lessee’s obligation to refurbish or restore the premises at the end of the lease.

These are just some of the terms that should be included in your commercial lease agreement. For example, less obvious provisions might cover contingencies for unforeseen events such as what happens if the premises is damaged or destroyed.

If you need any assistance, contact one of our lawyers at [email protected] or call 02 9279 1179 for a no-obligation discussion and for expert legal advice.