5 Things You Need to Know About Property and Leasing
1A lease is a contract that sets out the rights and obligations of the owner of a property (Landlord or Lessor) and the person or entity who will occupy the property (Tenant or Lessee). All leases contain provisions for payment of rent, the length of the lease (term) and other clauses for maintenance and repair. There are two types of commercial lease: retail and commercial, noting retail leases are regulated by State and Territory based legislation (Retail Leasing Legislation) and differ across Australia. LegalVision has experience working with the legislation in all States and Territories.
2Heads of Agreement (or a lease proposal) can be binding: requiring both Landlord and Tenant to enter into a lease). As a result, both landlords and tenants should obtain legal advice on any Heads of Agreement to ensure that any lease proposal complies with their understanding of the lease negotiations.
3A retail lease is a special type of commercial lease, noting each individual State or Territory in Australia has specific retail leasing legislation which offers a degree of regulatory compliance and protection for retail tenants. Retail leasing has an additional level of protection for tenants, including disclosure requirements for the landlord prior to the tenant’s entry into a retail lease. A commercial lease does not have the same protections offered to retail leases and is largely unregulated, leaving landlords and tenants to negotiate their own terms.
4A tenant may be required to pay lease preparation fees to a landlord. Note that this is prohibited in most states under Retail Leasing Legislation, however there is no such regulation for commercial leases and it is simply a matter for negotiation.
5Most leases contain make good provisions, requiring the tenant to remedy any damage or redecorate premises at the end of the term. It is important to understand any make good requirements before committing to a lease.