A lease for a child care centre is usually a long term commercial property lease between a landlord and tenant. It is important to familiarise yourself with the many steps involved in finding and negotiating a lease for your child care centre. Below, we provide potential tenants seven tips regarding their rights and obligations, as well as how to safeguard your interests.
1. Ensure Your Needs Are Met
Whether your goal is to expand and grow your business or establish regular turnover, you should choose a location that will allow for this over the entire duration of the lease.
2. Choose Longer
Traditionally child care centre leases have a longer life – sometimes up to 10 or 15 years. It would then be very expensive to move if you have only occupied the premises for two or three years – not just because of the infrastructure required but also because most of your customer base will be dependent on your location.
3. Research and Inspect
Like you would do for any other commercial or residential lease, make the necessary inquiries and do your research. You may want to compare it to other premises in the area, and you should always check that it is not subject to other restrictions like work orders or prohibitions.
4. Be Careful of the Outgoings
Outgoings, which are documented in the lease, include the additional costs that are passed on to the tenant by the landowner. Commonly, outgoings include:
- Taxes and fees such as council rates, water rates and body corporate levies; and
- Maintenance and repair services; and
- Reasonable expenses incurred as a result of promoting the child care centre.
A lease that provides you pay outgoings may also require the landowner to keep you updated with estimated costs and the actual expenditure. You should be aware of the outgoings you are responsible for before signing.
5. Get Professional Advice
You should always obtain legal advice before signing a commercial lease. It is vital to read through the entire document so that you have a solid understanding of what you are signing. For example, if the lease discusses the activity that you, as the tenant, can engage in on the premises, you should be certain that it will not restrict you from doing something that is fundamental to child care.
The terms of a commercial lease are also open to negotiation so professional advice may help tailor it to suit your circumstances.
6. Fitting out a Child Care Centre
You can negotiate terms before signing the lease. Depending on what condition the premises are in, the centre may need work before you can start operating. You should try to negotiate with the landlord to offer you early access to carry out these works or negotiate a rent-free period for the purpose of carrying your fit-out works.
However considering the unique nature of a business that cares for children, it will also need to meet additional requirements that could be costly. Meeting fire safety standards and installing appropriate security measures are among these prerequisites to running a safe and profitable business. Also, you should inspect the condition and age of all existing structures like walls, roofing, guttering, garden and fences. Don’t be afraid to seek professional advice for anything outside of your expertise. Importantly, take this step before signing the lease!
7. Know Your Rights as a Tenant
Like any other lease, you need to know your rights both before signing, as well as during the lease. If for instance, you have to sell the business and are unclear about whether you can transfer the lease to a new tenant, or would like to check how to renew the lease, speak with a commercial leasing lawyer. Overall, it is important to remember that you have rights as a tenant.
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If you have any questions, or need assistance negotiating your commercial lease for your child care centre, get in touch with our commercial leasing team on 1300 544 755.
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