Are you looking to start you own mechanic business, or expand your already existing mechanic business? If so, it is important that your take great care when signing a commercial lease. Commercial leases define how you use the property upon which your mechanic business operates. Without a clear and concise commercial lease, you leave yourself open to manipulation by the owner of the property, and misunderstandings as to how you will use the property. However, a well worded commercial lease will allow you to focus on running your business and making a profit, instead of having to focus on damage control as a result of a poorly worded commercial lease.

Who has title over the land?

You should ensure that the person with whom you are negotiating has the legal ability to lease the property. This may sound obvious, however, sometimes you may be dealing with a company or a lawyer acting for the owner of the property. In these situations it is vital that you ensure that they are acting with the knowledge of the owner. An effective way to do this is by visiting the Land & Properties information website and obtaining a copy of the certificate of title to the land that you will be leasing. This will tell you who the owner of the property is, and if there are any other leases on the property of which you are unaware.

In addition, if the land is owned by a company, it would be wise to visit the ASIC website. Here you will be able to determine who the directors of the company are, and ensure that the company exists and is solvent.

These may seem like unnecessary steps, but you must remember that this is your business and your livelihood, and it is always better to be safe than sorry when dealing with commercial leases.

How long is the term of the commercial lease? Are there options for renewal?

After determining whether the person you are dealing with has the authority to grant a commercial lease, you must then determine the duration of the lease. In addition, you should also clarify the conditions surrounding any option to renew your commercial lease for your mechanic business.

It is all well and good to be granted a commercial lease, however, if you have to relocate after the original lease runs out, your mechanic business will never have the opportunity to grow. Consequently, good business practice means you will want the original lease to be at least three years, with an option to renew before the lease runs out. In addition, you should ensure that you remember the dates within which you are able to renew, because if you forget, then you risk losing the lease entirely.

Use of the property

An essential aspect of all commercial leases is the determination of what the property will be used for. There is no point in signing a commercial lease designed for a retail chain, when in fact you want to open a mechanic business. As a mechanic, you will need to use machinery, make noise and have vehicles moving around your property and the neighbouring streets throughout the day. As a result, you need to ensure that your commercial lease accommodates all of this. Your commercial lease acts as your shield in order to ensure that you can use the property the way that you want to. In addition, if for some reason you are unable to use the property for the purpose in the lease, it allows you to seek damages from the owner of the property, rather than being made to suffer yourself.

Conclusion

Commercial leases are essential in ensuring the success of your mechanic business. When signing a commercial lease, it is important that you first determine who has title over the land you are leasing. Secondly, you should ensure the length of the lease is to your liking, and that there is an option to renew. Thirdly, you should make sure that the use of the property is what you want it to be.

Finally, it must be noted that there are many legal pitfalls associated with signing a commercial lease, so it is advisable that you seek the advice of a lawyer at some point during the process. Examples of how a lawyer can assist you with signing a commercial lease can be found here. Additionally, if you have any other questions concerning commercial leases, you should call LegalVision for a fixed-fee quote. Our leasing lawyers are ready to assist!

 

Adi Snir

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