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Home | Property & Conveyancing Law | Commercial & Retail Leasing

Considering a Commercial or Retail Lease?

Leasing of property for commercial uses is very common. A lease gives the tenant the right to occupy all or part of a property to conduct their business activities as permitted by the lease. In return the tenant pays the landlord a rent and carries out any other requirements of the lease. Commercial leases generally fall into two different groups. One group is shop and retail leases and the other is leases of other commercial properties such as factories offices and warehouses. Whilst the general concept of leasing remains the same, In New South Wales there are different statutory provisions and regulations which govern their operation. The Retail Leases Act 1994 applies to a large number of specified retail businesses and for any shop use in a complex with 5 or more shops.

Elements of a Commercial Lease

The most important elements of a commercial lease are:

At Turner Freeman, our experience property law team can provide you with the advice you need about commercial and retail leasing. For any further enquires please contact us one 13 43 63. Our offices are located in Sydney, Parramatta, Campbelltown, Newcastle, Penrith, Wollongong and Gloucester.

FAQ

Can my Company hold the lease of the property?

Can my Company hold the lease of the property?

Yes. Landlords will most likely require the personal guarantees of the Company Directors which will leave them personally liable if the Company cannot meet its obligations.

What if my business is a franchise?

What If my business is a franchise?

Where the use will be for a franchise the franchisor will generally require additions to the lease so that they remain in control of the property if you cannot run the franchise to the required level. Any lease negotiations must involve the Franchisor before documentation can be finalised.

My landlord has not yet repaired damage to my shop. Can I stop rent payments till they fix it.

My landlord has not yet repaired damage to my shop. Can I stop rent payments till they fix it.

No. You have legal rights against the landlord but you must continue to pay the rent. Otherwise you risk losing your lease.

Will I have to pay a bond?

Will I have to pay a bond?

Yes. Most commercial leases require security. This can be in the form of a cash bond or a guarantee from your bank. Cash bonds are now required to be lodged with Government agencies that have procedures to resolve any disputes over claims to the bond.

Can I ask my tenant to pay the GST on the rent?

 Can I ask my tenant to pay the GST on the rent?

As long as the lease contains a condition allowing you to do so, yes. You must give the tenant a tax invoice that complies with the GST legislation. It will still be your responsibility to pay the GST to the tax office even though you collect it from the tenant.

If the rent is not paid can the landlord lock me out?

If the rent is not paid can the landlord lock me out?

Yes. If the rent is in arrears for more than the time allowed in the lease, the landlord can change the locks. This action is called re entry and ends the lease.

Can the landlord end the lease where the tenant has breached some condition or requirement of the lease other than payment of rent.

Can the landlord end the lease where the tenant has breached some condition or requirement of the lease other than payment of rent.

Yes but before being entitled to terminate the lease, the landlord must have first given notice to the tenant allowing whatever time is reasonable to remedy the breach and the tenant has failed to do so.

What if the property is damaged and can't be used?

What if the property is damaged and can't be used?

As long as the tenant didn't cause the damage, the obligation to pay rent stops until the property is reinstated. If only part cannot be used, the rent is reduced proportionally.

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