Have you heard the news? We recently merged with The Lease Bureau, a Kent Town based company that specialises in providing professional, legally binding lease documents for commercial properties. With this new string now added to our bow, we thought it was time to give you a run down on what commercial leasing is.
So what is a commercial lease?
A commercial lease, in essence, is like a rental agreement for a house or unit that most people would be familiar with, but it applies to properties used by businesses. By definition, a commercial lease contract is an agreement between a lessor and lessee to use an office, warehouse, industrial space or other facility, for the purpose of running a business, storage or warehousing. Retail leasing is a similar concept, however this agreement also allows the lessee to use the premises for the purpose of selling goods, such as shops and shopping centres.
What is included in the commercial lease?
The commercial lease contract will clearly outline the obligations of both the lessor and lessee. The main things covered include the following:
- Details of the lessor, lessee and premises
- Term (length) of the lease, as well as a clause for renewing the lease
- Annual rent amount
- Outgoings amount, such as council rates, building insurance, emergency services levy and water rates
- Permitted use of the premises, e.g. what business is allowed to be conducted on the property
- Permitted trading hours (if applicable, such as for a shop within a shopping centre)
- Common areas such as bathrooms, stairs and carparks, if the premises is within a shared building
- Details about who is responsible for any maintenance and repair costs
- Rules around sub-letting the premises
- A process for dispute resolution.
Who prepares the commercial lease and when do you need one?
In almost all cases, the commercial lease document would be prepared by the landlord or lessor, prior to the property being leased. They would use the services of a professional, such as Eastern Conveyancing or The Lease Bureau, to prepare a lease that sets out the obligations of both the landlord and tenant, as mentioned in the list above. There is usually room for negotiation from the tenant, to ensure that everyone is happy with the agreement.
Once any negotiations are complete, the lease would then need to be signed by both parties before the tenant is able to move in and begin making use of the property. Generally, commercial leases run for a longer period of time than residential tenancy agreements, so that the business has more security and stability. When it comes to the end of the lease, the tenant would normally have the rights to renew the contract without too much hassle.
Want to know more?
If you’re a new commercial property owner, looking to enter into a commercial lease agreement for the first time, or just wanting to know more about commercial leasing in general, we are here to help. Get in touch with us on 08 7226 8033 today, and one of our commercial leasing specialists will be happy to assist you.