In Short
- Lease terms can significantly impact your accounting business’s stability and growth; plan carefully before signing.
- Consider renewal options and review terms periodically to ensure they align with your business’s evolving needs.
- Ensure the lease allows for potential changes in property use to support future business expansion.
Tips for Businesses
When considering a commercial lease, ensure it meets your current and future needs. Negotiate terms that protect your interests, especially regarding lease length, renewal options, and permitted use. Reviewing these points with a legal adviser helps avoid costly issues and allows for smoother business growth over time.
The accounting sector in Australia is thriving, driven by a risk-averse business climate. This growth presents numerous opportunities for accountants to expand their services. Whether you want to grow a home-based practice or transition into commercial premises, understanding your commercial lease is essential. The terms of your lease can significantly shape your business operations. A well-structured lease not only ensures stability but can also offer a competitive edge. From spacious offices to client-friendly facilities, a thoughtful fit-out for your office is key. This article covers how to navigate commercial leases effectively for your accounting business.
Understanding Lease Terms for Accounting Businesses
The primary legal consideration for your accounting business is the term of the commercial lease. Across Australia, no statutory or common law rules set a minimum lease duration. Typically, initial terms range from two to five years, with an option to renew. However, lease terms can vary significantly based on negotiations between you and the landlord, each considering individual business requirements.
Shortening the lease term is not an option if the business underperforms, and if you cannot continue operating from the premises, you will still be obligated to pay rent unless you find a new tenant or pay a cancellation fee. In most cases, if you vacate, you remain liable for rent until a new tenant occupies the property.
Consider the possibility of extending the lease through a renewal option. While location and accessibility may take priority, a larger space might become necessary as your business grows. Before signing, reflect on the timing and duration of any renewal options that might support your expansion plans.
Reviewing Lease Terms Upon Renewal
Renewing your lease allows you to reassess various terms to ensure they align with market trends and your business needs. Key considerations include the method of rental determination and any additional expenses, such as utilities, maintenance, or shared area charges. Depending on your relationship with the landlord, these terms may be open to negotiation. To safeguard your business interests, ensure that any agreement on lease terms is documented in writing and signed by all parties. This formalised agreement will bind both parties to their respective rights and obligations under the lease.
This guide will help you to understand your options when you purchase a business with leased premises.
Permitted Use of the Premises
Before finalising your lease, confirm that it allows for your intended use of the property. Also, consider potential future changes in your business. If you wish to alter the primary use of the property as your business expands, using the premises in a manner not specified in the lease could constitute a breach, allowing the landlord to terminate the lease. You may wish to negotiate with the landlord to permit future use adjustments. If successful, you will need either a new lease or an amended version of the existing lease to formalise this change.
Key Takeaways
Many successful accountants transition from home-based operations to commercial premises. As a business owner, carefully consider the commercial lease terms, as they will shape the way you manage and grow your business. The renewal option is especially valuable, as it provides flexibility for future growth. Additionally, ensure that the permitted use aligns with your business goals, as this will enable you to expand as envisioned.
If you require further guidance on commercial leasing or assistance in growing your accounting business, our experienced leasing lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
Understanding your lease terms is crucial as it shapes your business operations, offers stability, and can give you a competitive edge. A well-structured lease allows for a thoughtfully planned office space, which is essential for your business’s growth.
In Australia, commercial leases typically last two to five years with an option to renew, though they can vary based on negotiations with your landlord. There are no legal requirements for minimum lease lengths, so it should be aligned with your business plan.
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