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  CW Hooper & Hooper

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Do you know what is to happen at the end of your commercial lease?

5/29/2015

1 Comment

 
By Pamela Wardle, Legal Practitioner Director

Negotiating a lease often represents a new business or venture and can be a very exciting time.  At this stage, the parties often focus on issues which will apply immediately such as the rent payable, how it is payable and whether or not the rent includes GST, which charges are covered in outgoings and what proportion is payable by the Lessee and what is the term of the lease. 

When negotiating the lease it is equally important to consider the terms which relate to the end of the lease, for example:

1.       In what condition are the premises to be left when the Lessee leaves?  For example, is the Lessee to remove all fixtures and make good any repair, essentially leaving an empty shell?  If not, what is to remain and in what condition?  What types of costs must the Lessee pay if he or she does not comply with the terms of the Lease and how can the Lessor recover these costs? 

2.       What are the Lessor’s rights if the Lessee owes money at the end of the Lease?  Can the Lessor recover those costs as a liquidated debt or are there specific steps the Lessor must follow before recouping those costs?

3.       Who pays any legal costs associated with ending the lease?  For example, if the lease is registered does the Lessee pay the costs of surrendering the Lease from the title?

It is important to consider these issues and others which may arise at the end of a lease to assist all parties to end the lease on good terms.

1 Comment
Michael Griffith
10/31/2018 05:58:21 am

The cost of allocation between the landlord and the tenant varies from one lease to another lease. When doing a commercial lease, make sure it is protected. If the lease remains unprotected, then it will push your business into the hell. No matter, the lease is secure or insecure, as a tenant, you need to start thinking about the renewal at least 1 year before the lease expires. Consulting a commercial property solicitor will be a good idea. Better the tenant should start the process in advance so that he will remain stress-free during the renewal. Consult a reputable estate proxy to get handy recommendations on making the lease secure- http://www.martinlandis.com/ .

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