When you negotiating the terms of a commercial lease you must be very specific about what you are agreeing to pay. At Pritchard Law Group we can assist you with information and advice on how to overcome these issues. Some of the issues are:

•  Is it a straight rent or will the tenant be required to pay rent plus the landlord’s outgoings?
• If the tenant has to pay outgoings, what are these outgoings?  These can be just a few or as many as the fertile imagination of the leasing agent can dream up.  They can extend to the tenant paying the landlord’s rental management fees, repairs and renovations, loss of rent insurance and on and on.
• Rental increases. Most leases provide that the rent is to be increased annually.  This can be CPI increases or a fixed rate of between 3% and 5%.  Leases with high escalation clauses have a ratchet effect, which means that over a period of time the rent for the premises escalates higher than the market rental for the same premises.

Renovation OR Make Good Provisions

These require the tenant to refurbish every three years or so and when the leases finishes, require the tenant to strip out any improvements they have made and restore the premises to the state it was when they took over.

LEGAL COSTS

It is usually expected that the tenant pay the landlord’s legal costs for the preparation of commercial leases.  However, you can negotiate out of this.  Many landlords leave the wording of their lease to their solicitors and this often results in an overly long, overly complex lease, which is intended to give the landlord every advantage and restrict the rights of the tenant.

You can save yourself a considerable amount of cost and expense and difficulty if you obtain our advice BEFORE entering into negotiations for a lease.  We can steer you in the right direction and assist you in negotiating the terms of the lease before it gets to the landlord’s lawyers.

Paul Pritchard