Are you starting a gym? Leasing a premises or equipment may be a good way to save money if you’re not financially capable of buying. A commercial lease is an agreement that provides a tenant exclusive possession over a commercial premises for a certain period of time. Your lease will state what can and cannot be done upon, and to, your premises and can ultimately determine the type of business you run. With this in mind, it is sensible to speak to a leasing lawyer as soon as you receive your leasing documents.
Here are 3 things you should be aware of when entering into a commercial lease:
Your rent can increase
New business owners often make the mistake of believing that their rent will stay fixed throughout the duration of a lease. In commercial leases it is rare that a rent will be fixed for a period of 5 or more years. Often a lease will contain a term permitting a rent increase – either through a fixed rate increase (where your rent will increase at a fixed rate or percentage on a yearly basis), a Consumer Price Index Increase (where rent increases in line with the CPI each year or on an annual or periodic market review (a review based on a calculation of the current market rent by a property valuer, real estate agent or the landlord). As a new gym owner, it is important to forecast these increases in rent when you start your business. Speaking to a leasing lawyer can help you understand how the variety of different costs within your lease work, and even save you money down the track.
Renovations can only be made to the premises in accordance with your lease
You should be allowed to make certain renovations and fit-outs so the premises looks like a gym. Your lease will contain specific fit-out terms that allow and prohibit certain changes from being made to your premises. Without the correct terms in place, you may be left with a gym without reinforced boarding, which leaves the gym one dumbbell-drop away from a having a hole in the floor. These terms are negotiable, so it is beneficial to speak to a leasing lawyer to ensure that an appropriate fit-out clause is inserted in your lease.
You should be given a rent-free period to renovate
There are two important dates any tenant who wishes to renovate or fit-out a premises should pay particular attention to in a commercial lease. The handover date refers to when the premises will be provided to your business. On this day, the landlord will allow you to take possession of the premises, to make certain fit-outs. The tenant does not usually pay rent during this period. The lease commencement date is when a lease will begin. If you do not renovate your shop before the commencement date of a lease, you may still be forced to pay rent. That is why it is sensible to speak to a leasing lawyer about appropriate handover and commencement dates.
Before you enter into any agreement for your new gym, it is important to speak to a leasing lawyer. Our team of leasing lawyers have extensive experience in negotiating leases for new gym owners. Call LegalVision on 1300 544 755 and get a fixed-fee quote today.