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The process of entering into a commercial lease agreement can be complex, and fraught with potential risks. Your rights and obligations as a landlord (lessor) and tenant (lessee) differ markedly, and for this reason, it is important to seek advice from experienced professionals before entering into an agreement and ensuring you are fully aware of your rights and obligations. The consequences of a mistake or misunderstanding in the commercial lease arena can be both time-consuming and extremely costly. Commercial lease disputes also often lead to litigation which can expose your business to significant costs and expense. Finally, in NSW (Sydney) lease agreements should be registered with the land registry service (LRS) to ensure that the rights and interests of both landlord and tenant are protected. Again, a failure to comply with registration requirements may result in complications and additional costs, so this is another reason to seek advice from a professional lawyer.
What is a commercial lease?
When taking out a new lease in NSW, it is important to note that a commercial lease does not carry the same protections for tenants as a residential lease; it falls under commercial law. A commercial lease is a legally binding agreement between a landlord (lessor) and a tenant (lessee) for the rental of commercial or retail business premises. Commercial property lease terms can vary significantly from lease to lease and may also vary according to whether the lease is for commercial premises or retail premises. Commercial leases contain different terms, rights and obligations to those governing residential leases including council zoning, permit and building standard requirements. Further, consumer protections that apply to residential leases do not cover commercial leases. Commercial property lawyers also have a vested interest in Commercial law in addition to property law and conveyancing. If you are a landlord it is important to have a commercial leasing lawyer draft a lease to ensure your objectives are met, and your rights and interests are protected. Equally, as a potential tenant, it is important to ensure that you have fully reviewed the terms of the lease to ensure that it meets your needs and that you will be able to employ the premises for your intended purpose.
Retail Lease Legislation
If a business is located in a retail shopping centre and wholly or predominantly carries on a retail business, it is likely that the lease will be governed by the Retail Leases Act 1994 (NSW). The broad aim of the act is to ensure retail leasing arrangements are fair and to provide mechanisms to resolve disputes between landlords and tenants should they arise.
Negotiating a Lease and leasing matters
Commercial lease terms, including terms relating to rent, bond, signage, fit-out, common areas and landlord obligations are usually negotiable between the parties. Other terms, including permissible use(s), building rules, use of public facilities, access to common areas and so on may not be. As a tenant, it is important to consider your circumstances and requirements carefully before committing to a lease. Inexperienced tenants are often caught out by accepting the first lease offer they receive. This may be to their detriment in the long run. A better idea is to have a commercial leasing lawyer review your lease and advise on any unfair provisions and negotiate amendments with the Landlord or the Landlord’s conveyancing lawyer prior to the lease agreement being finalised. This can result in the savings of thousands of dollars over the term of a lease. Contact us today for expert legal advice from a commercial leasing lawyer.
Real Estate Fixtures and Fit-Out
New South Law requires that a landlord provide prospective tenants (the business owners) with a disclosure statement (aka disclosure report) setting out the condition and functionality of all fixtures and fittings. This condition report should be obtained and carefully reviewed before entering into a lease. This generally also applies to industrial leasing, commercial leasing and retail leases.
New lease Costs for Commercial Property
In addition to ongoing rent costs, there are a number of costs to be borne by the tenant, including security bonds, insurance costs, legal costs (lease preparation in some cases and costs on default), refurbishment and fit-out expenses, repairs and maintenance, and refit or making good expenses at the conclusion of the lease. There is also often It is important to obtain advice on these matters before agreeing to a lease. Again, these are areas where a commercial leasing lawyer from the experienced team at Jameson Law Sydney can provide conveyancer legal services including advice and guidance on your legal matter, lease document and dispute resolution.
Sydney NSW Covid Notice
Our Sydney office is still open on an appointment basis. Book in your appointment with an expert commercial property lawyer today. Our Parramatta CBD office is offering its legal services during covid by appointment only and you can contact our commercial lease lawyers today to make a booking.
Frequently Asked Questions.
An anchor tenant is one which generates significant foot traffic to the site. Common examples supermarket, department stores and retail showcase stores. It may be prudent to incorporate a term allowing you as tenant to terminate a lease if an anchor tenant departs.
A landlord is empowered to ‘lockout’ and evict a tenant is rent has not been paid for the requisite term. A written notice must be given of non-payment before taking this action. Landlords are required to comply with both the lease terms and state legislation in carrying out lockouts and evictions.
A redevelopment clause empowers landlords to terminate a lease in order to carry out prescribed types of major building works. It is important to ensure that the lease provides fair treatment and compensation for tenants in these circumstances. Further, leases may include both redevelopment and demolition clauses.
Retail and commercial leases may permit a tenant to assign the lease or sublet the whole, or part, of the premises to another tenant. This can be exercised in cases where a business decides to sell or can no longer operate the business. In most cases, the assignment will be subject to a landlord’s consent and may also be subject to other legislative requirements.
Retail and commercial leases may permit a tenant to assign the lease or sublet the whole, or part, of the premises to another tenant. This can be exercised in cases where a business decides to sell or can no longer operate the business. In most cases, the assignment will be subject to a landlord’s consent and may also be subject to other legislative requirements.
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Jameson Law Offices
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PO Box 73
Parramatta NSW 2124 - info@jamesonlaw.com.au
- 02 8806 0866
- 02 9052 0840
Contact Us
-
PO Box 73
Parramatta NSW 2124 - info@jamesonlaw.com.au
- 02 8806 0866
- 02 8046 6477
Jameson Law Offices
