Commercial Leasing
A commercial lease can shape a business relationship for years
A commercial lease is more than an agreement about rent and premises.
For a tenant, the lease can affect where and how the business operates, the costs it carries and the flexibility it has as circumstances change.
For a landlord, the lease establishes the terms on which an important asset is occupied and the rights and obligations that govern the relationship with the tenant.
At Watt & Severin, we advise landlords and tenants on commercial leasing matters from the initial negotiation and preparation of the lease through to variations, assignments, renewals and the end of the leasing relationship.
How can we help?
Landlords
Preparing and negotiating leases and advising landlords throughout the leasing relationship.
Tenants
Reviewing proposed leases, explaining obligations and helping tenants understand the commitment they are making.
Changes During a Lease
Assignments, variations, options, renewals and other changes that arise during the term.
Lease Issues and Disputes
Advice when obligations are not met or a disagreement arises between landlord and tenant.
Advice for Landlords
Put the leasing arrangement on a clear footing
A well-prepared lease should accurately reflect the commercial agreement reached with the tenant and clearly establish the parties' respective rights and obligations.
The appropriate terms will depend upon the property, the tenant, the intended use of the premises and the commercial arrangement being negotiated.
We can assist landlords with preparing, reviewing and negotiating commercial leases and related documentation.
Depending upon the circumstances, this may include provisions dealing with:
rent and rent reviews;
outgoings and other occupancy costs;
permitted use;
the term of the lease;
options to renew;
security deposits and bank guarantees;
guarantees by directors or other parties;
insurance;
repairs and maintenance;
alterations and fit-out;
assignment and subletting;
make-good obligations;
default and termination; and
obligations at the end of the lease.
During the lease
The landlord and tenant relationship does not end once the lease is signed.
Questions may arise about the interpretation of lease terms, rent reviews, maintenance obligations, proposed alterations, changes in ownership of the tenant's business or requests to assign the lease.
We can advise landlords about their rights and obligations and prepare the documentation required when leasing arrangements change.
Need advice about a commercial lease? Talk to Watt & Severin.
Advice for Tenants
Understand the commitment before you sign
A lease can be one of the most significant ongoing commitments of a business.
The headline rent is only part of that commitment.
Outgoings, rent increases, fit-out obligations, security requirements, maintenance, insurance and make-good provisions can materially affect the true cost and flexibility of the arrangement.
Before signing a lease or an agreement to lease, it is important to understand what you are agreeing to and whether the proposed terms suit the way you intend to operate the business.
We can review the proposed leasing documentation, explain its practical effect and negotiate amendments where appropriate.
Think beyond the first year
Commercial leases often operate for several years and may include one or more options to renew.
It is therefore useful to consider not only whether the premises work for the business today, but what the lease allows if circumstances change.
Questions worth considering can include:
Can the business use the premises for everything it intends to do?
How will the rent change over time?
What other occupancy costs must the tenant pay?
Is there an option to renew and how must it be exercised?
Can the lease be assigned if the business is sold?
What security or personal guarantees are required?
Who is responsible for repairs and maintenance?
What must be removed or reinstated when the lease ends?
The answers will depend upon the particular lease.
Our role is to help you understand those obligations before you commit.
Considering leasing commercial premises? Talk to us before you sign.
Changes During a Lease
Businesses and circumstances change
A lease may need attention long before its expiry date.
The tenant may sell its business. The parties may agree to change the premises or the terms of the lease. An option may need to be exercised. The ownership of the property or tenant entity may change.
We can assist with matters including:
assignments of lease;
variations;
options and renewals;
extensions of term;
changes to leasing arrangements;
landlord consents; and
documentation associated with the sale or purchase of a business.
Where a lease forms part of a broader business or property transaction, we can deal with the arrangements together rather than treating them as unrelated matters.
Lease Issues and Disputes
When the parties do not agree
Disagreements can arise about rent, outgoings, repairs, maintenance, permitted use, breaches of lease, make-good obligations and many other aspects of the landlord and tenant relationship.
Sometimes the disagreement arises because the parties interpret the lease differently. In other cases, one party may not have performed an obligation required by the lease.
The first step is usually to understand what the lease says, what has occurred and what outcome you are trying to achieve.
We can review the documentation, advise you about your legal position and help you consider the available options.
Where there is a practical opportunity to resolve the issue, that should be considered. Where formal action is required, we can advise you about the appropriate next steps.
Is the lease for a retail shop?
Some commercial premises in Queensland are subject to specific legislation governing retail shop leases.
That legislation can impose requirements and protections beyond those contained in an ordinary commercial lease, including requirements concerning disclosure and aspects of the leasing process.
Whether a particular lease is a retail shop lease depends on the premises and the circumstances.
We have a separate page dealing specifically with Queensland retail shop leasing.
Read more about Retail Shop Leases →
Commercial leasing often connects with other transactions
A lease may form part of the purchase or sale of a business, the acquisition or sale of commercial property or a broader commercial arrangement.
Those transactions need to work together.
Where we are assisting with the broader transaction, we can consider the lease in that context and coordinate the legal documentation accordingly.
Talk to us early
Whether you are a landlord preparing a lease or a tenant considering new premises, involving us before documents are signed provides the greatest opportunity to identify issues and negotiate appropriate terms.
If the lease is already in place and a question or problem has arisen, bring us the lease and tell us what has happened.
We can help you understand your position and what options are available.
Talk to Watt & Severin about your commercial leasing matter.