With employees gradually returning to work in their offices, landlords, tenants, sub-tenants who are planning to lease or sub lease commercial premises should carefully consider the terms and conditions of such lease documents.
A commercial lease is a legally binding document setting out the rights and obligations between the landlord and the tenant (or sub-lessor and sub-lessee in case of a sub-lease). It is beneficial to have a commercial lawyer involved in the early stages of a commercial lease deal as they can negotiate any key lease provisions on your behalf and save you time and money and reduce the risks of any potential dispute in the long term.
For landlords, the importance of having an appropriately drafted commercial lease prepared by a lawyer ensures that the document is legally enforceable. For tenants, it equally important that due diligence is conducted, and serious consideration is given to the respective obligations of the parties before deciding to enter a commercial lease.
In our experience, the most commonly contentious issues in commercial leases concern:
– Rent reviews.
– Options to renew.
– Make good provisions.
– Ability to Assign.
– Rebates and incentives.
Landlords are mainly concerned with stability. For this reason, provisions on rent, rent reviews, options to renew and bank guarantees/security should be clearly drafted in a commercial lease. If a landlord has plans to restructure its company or business, a change in control clause should be factored into the commercial lease.
On the other hand, tenants should consider market trends and determine if the proposed rent is appropriate for the premises they intend to lease. Tenants are typically not liable for structural repairs and replacement of fixtures such as plant and equipment. It is also prudent for tenants to obtain as much information as possible on outgoings and carry out a condition report before or on the commencement of the commercial lease to mitigate any repairs and maintenance and any make good disputes.
Contact Ita Wong – ita.wong@lewisholdway.com.au at Lewis Holdway Lawyers if you are considering leasing a commercial property in Melbourne. We are experienced in reviewing, negotiating, and providing legal advice on commercial lease documents (including Retail Leases); preparing heads of agreements, commercial leases, sub-leases, variations of lease and agreements for lease that are specific to our clients’ requirements to ensure that your business operates as efficiently as possible.
Copyright © 2021 Lewis Holdway Lawyers. Website Design By LGT Digital