You’re starting a business, and you need a commercial location. Whether you’re moving into your own office space for rent, setting up a shop or something else, this is a hugely exciting time for your business.
Instead of signing on the dotted line immediately, it’s very important that you cautiously check the contract (also known as the commercial lease agreement) the landlord offers you.
Renting commercial property is a big obligation. The success of your business may depend on certain terms of the lease. Before approaching a landlord, it is best to understand how commercial leases differ from the more common residential variety, and before signing anything, make sure you understand and agree with the basic terms of the lease, such as the amount of rent, the length of the lease and the configuration of the physical space.
If you’re a first-time business owner, undertaking a commercial lease review on your own can be nerve-wracking. And let’s say you’re an experienced commercial tenant, the specifics of your lease will change based on what the landlord wants.
What is a commercial lease?
A commercial lease is a legally binding contract made between a landlord and a business tenant. The lease gives a tenant the right to use certain property for a business or commercial activity for a period.
Additionally, the lease outlines the rights and responsibilities of both the landlord and tenant during the lease term.
The common provisions in a commercial lease will address matters such as:
(a) How and when the rent is to be paid
(b) How and when a rental review occurs
(c) Maintenance and repairs of the property
(d) The type of business that may be conducted on the premises
(e) Procedure for breaches and termination
(f) Provisions for lease renewal
Commercial lease agreement in Victoria
In Victoria, commercial lease agreements should be in writing. Landlords are required to give a copy of a written residential tenancy agreement to the tenant.
A written lease is generally considered to serve certainty and clarity. The lease sets the rent for the lease term. Unless the language of the lease states otherwise, rent cannot be increased during the lease term. A lease spells out the obligations of the tenant and landlord.
Why it’s best to hire a lawyer
You may be feeling overwhelmed by all the complicated terms which can exist in your commercial lease. Instead of you trying to focus on your product and operations, it’s best to let an experienced commercial lease lawyer help with your commercial lease review. Steering the legal and financial minefield of a commercial lease can be done a lot more smoothly with an experienced lawyer.
When you decide to hire a commercial lease lawyer in Victoria, you can get help understanding the complex legal issues in the lease. You can also discuss any verbal assurances your landlord has made to ensure that your lawyer gets them into the final lease agreement.
In our experience, even landlords who have a “take it or leave it” attitude become more reasonable and cooperative with a lawyer’s presence and comments on the lease.
Contact Prompt Legal Services today for a commercial lease review