In Short
- Understand rent review terms before signing. Rent may be reviewed every few years, but ensure the review method is fair and predictable, such as linking it to the Consumer Price Index.
- Confirm permitted use in your lease. If you plan to offer additional services like piercing, ensure your lease allows for it to avoid legal issues.
- Secure the right insurance. Public liability, plate glass, and contents insurance can protect your business from unforeseen damages and liabilities.
Tips for Businesses
Before signing a lease for your tattoo studio, confirm key details such as rent review frequency, permitted use, and lease duration. Ensure your workspace complies with health regulations and that you have the necessary licences and insurance. Consulting a leasing lawyer can help you negotiate better terms and avoid costly mistakes.
Establishing a new tattoo studio or parlour requires several essential considerations for a business owner, from ensuring sterile and clean facilities to signing a commercial lease. You must grasp the legal aspects of entering into a commercial lease. In doing so, you can steer clear of unfavourable rent or landlord conditions. This article highlights key factors to help you secure a smooth commercial lease for your tattoo studio.
This guide will help you to understand your options when you purchase a business with leased premises.
Reviewing Rent for a Tattoo Studio
Almost all commercial leases include provisions for periodic rent review during the lease term. Firstly, be aware that rent may be reviewed every two, two and a half, or three years. Note that this depends on the owner’s preference for the commercial property. However, rent reviews cannot occur annually unless an objective review mechanism is employed, such as the Consumer Price Index. Depending on the duration of your commercial lease, rental prices may only be reviewed once or twice.
The new rent price can be based on any factor you and the commercial property owner deem appropriate. Consequently, you could have the rent dependent upon profit margins and the average rent price in the area. You could also even simply agree to keep it in line with the Consumer Price Index. It is important, however, that you choose the most predictable and fair mechanism possible. This way, rent review is something that you can plan for, rather than fear.
Commercial Leases for Tattoo Parlours
Many tattoo studio owners find themselves caught out when they agree to the terms of a commercial lease, often unaware of some of its legal technicalities. Consequently, when entering into a commercial lease for your tattoo artist business, you should be clear about the lease’s commencement and termination dates. If the lease is set to last five years after the keys have been exchanged, you must specify the date by which you must vacate the property.
You should also invest in facilities and equipment that comply with government and state regulations. Creating a sterile operating environment is strongly advised. As a business owner, you may be liable for criminal damages if medical complications arise due to negligence. In New South Wales and Queensland, tattooists must undertake finger and palm printing and police checks as part of the licensing process to become a tattoo artist.
Continue reading this article below the formPermitted Use
Ensure the lease accurately reflects the permitted use of the premises. Consider your intended use for the space. Determine whether it will solely be a tattoo parlour, a piercing studio, or another type of body modification studio, mainly since some establishments offer a combination of these services. The correct permitted use must be specified in the lease to avoid potential breaches and ensure the premises are not used for other purposes.
If you currently run a tattoo parlour but wish to operate a piercing studio as well, speak to the landlord to see if they are amenable to amending the lease so that the permitted use aligns with your new plans. Keep in mind that modifying the lease usually incurs costs for the tenant.
Insurances
When operating a tattoo parlour, you should ensure you have the right insurance to cover you during your tenancy. Typically, insurance would include the following
- public liability insurance;
- plate glass insurance; and
- content insurance.
Having the right insurance in place can help limit your liability if any damage occurs to the premises that does not result from your direct use.
Key Takeaways
If you are looking to start your own tattoo artist business or expand your already existing tattoo artist business, you will need to have an understanding of the legal considerations associated with entering into a commercial lease. You should also consider equipment leasing requirements, such as tattoo machines, chairs, sterile cleaning equipment and fit-out.
If you need help reviewing your lease, our experienced leasing lawyers can assist you as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers who can answer your questions and draft and review your documents. Call us today at 1300 544 755 or visit our membership page.
Frequently Asked Questions
Rent reviews typically occur every two to three years, but they cannot be conducted annually unless an objective mechanism, such as the Consumer Price Index, is used. Ensure the review method is fair and predictable to avoid unexpected increases.
Confirm the lease’s start and end dates, rent review terms, and any obligations regarding property maintenance or modifications. Ensure that the lease allows enough flexibility for your business needs.
We appreciate your feedback – your submission has been successfully received.
