Why bother with legal help when negotiating your Commercial Lease?

Last month we touched on 5 great tips to help you secure a better lease agreement for your commercial lease. If you’re feeling confident you can go straight to the negotiation table and make a go of it… unfortunately, you might find that your landlord has the upper hand. As is often the case, the landlord frequently sits in a better bargaining position, so it’s difficult to walk away from a lease negotiation on a level footing — let alone in a favourable position.

With that in mind, Sajen Legal thought it would be a great idea to introduce a retainer-based service that gives you access to the best legal support throughout the tenancy of your commercial lease. It’s called LeaseHelp, and the information below lists just some of the ways it will come in handy.

Rent Payable

Rent is typically up to you (the tenant) and the landlord to come to an agreement — it is certainly negotiable. There are a few ways that commercial leases are formulated, usually these include the size of the premises (which can get tricky depending on irregular sizes, or inclusions such as a lift/outdoor areas etc). A lease could also allow for rent plus a percentage of sales according to a rent review. Rent reviews calculate your rent using a benchmark such as the consumer price index (CPI), fixed increases, annual turnover or via a market review. All these culminate to be a negotiation nightmare if you’re unprepared or unaware, which is why it’s great to have a specialised lease lawyer in your corner! Hopefully, you walk away with a better deal.

Fit-Outs

Moving into a new space presents more than a few opportunities for your business. If you’ve been eyeing off new premises online and have a certain ‘vision’ for how it will look, then you can negotiate on that. A good lawyer can negotiate with your landlord resulting in a fit-out contribution from the landlord, a possible rent-free period or another bonus. Your lawyer can help you to correctly apportion these costs and work out the right agreements to ensure that your ‘vision’ doesn’t breach an alteration of the premises, keeping you out of any hot water.

Term

In a nutshell, your ‘term’ is how long the lease in place. Landlords typically like longer lease terms as they provide security, but your business may need to be more reactive. You might quickly need to outgrow your premises, or maybe a change of market or circumstance means you have to vacate the premises. A lease lawyer will ensure the ‘term’ works for you. One that is secure enough for you to provide some stability and short enough so that if you do outgrow the premises, or if you’re not as successful as you planned, you’re not left in a hole — a lease term that meets YOUR needs.

Assignment and subletting

For ‘retail leases’ there is some really good legislation that essentially limits the landlord’s authority over assignment. However with commercial leases, unless you have some good clauses that swing the negotiation to your favour, the lessor can make subletting and assignment a real headache for you. A professional with the right expertise can ensure a robust right to assign or sublet the lease that works in your favour.

Make good and refurbishment

Let’s say you get to the end of your lease, you’re all packed up ready to move into a newer and brighter future, but your landlord asks that the property is returned to the original condition. On that note, you may be up for the cost of recarpeting, repainting plus more than a few other expenses that you may have not seen coming. To make sure this isn’t too painful, your lawyer can negotiate on what’s fair and that ‘original condition’ isn’t a costly burden for you.

Preparing the lease

Although generally prohibited for retail leases, did you know that a lessor can charge you for preparing the commercial lease? And can even charge you further if you try to negotiate it. Strange right?! At Sajen we know that the best practice is for both parties to cover the costs of drafting their own leases and we’ll insist on it. Who knows what else a legal expert will uncover when reviewing and negotiating on your commercial lease…

As always…

Commercial lease disputes can get ugly but are often easily avoidable when you have two informed parties that clearly understand their obligations to each other. Good lease negotiation and agreements start with a mutual understanding that’s sealed in ink. That’s the true value of LeaseHelp [linkto:leasehelp] — something that’s fair and certain for both parties.

If you’re heading to a new place of business or setting up shop under a new lease, reach out to us here at Sajen Legal — we can guarantee that it’s worth your while. Visit LeaseHelp and get started today!


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