Points To Consider By A Commercial Property Lease Lawyer in Auckland
Unlike residential real estate, occupiers of commercial property are generally not the owners. They have the right to occupy the property by means of a lease. Residential tenants have a lease arrangement which is in most cases the standard Tenancy Agreement but with commercial premises, while the same agreement may be used, there will normally be extra clauses added to it.
What Are Common Clauses In A Commercial Property Lease?
A commercial property lease lawyer in Auckland can give you detailed advice on leases and tenancies. However, below are some generic descriptions of some of the more common terms that you might encounter with a lease for commercial premises.
- Rent: The amount of rent payable and when it is due are usually the first items to be negotiated in a commercial property lease. The rent may be fixed for the duration of the lease or may be subject to periodic review.
- Security Deposit: A security deposit is often required by the landlord as a form of protection against any damage or unpaid rent during the term of the lease.
- Term: The length of the lease is usually agreed upon by both parties and can range from a few months to several years.
- Right of Renewal shows whether the landlord might grant an option to renew the lease. Typically, this will have two or three renewal periods. For example, 3×5 means the occupier could renew the lease three times for five years each after the initial lease period.
- Repairs and Maintenance: The tenant is usually responsible for all repairs and maintenance during the term of the lease, unless otherwise specified in the agreement.
- Subletting: The tenant may be allowed to sublet part or all of the premises to another party, but this is usually subject to the landlord’s approval.
- Assignment: The tenant may be allowed to assign their rights under the lease to another party, again subject to the landlord’s approval.
- Termination: The terms of termination should be clearly stated in the lease agreement and will usually include a notice period and any penalties for early termination.
- Insurance: The tenant is usually required to take out an insurance policy to cover any damage or loss caused by their use of the premises.
- Alterations: The tenant may be allowed to make alterations to the premises, but this is usually subject to the landlord’s approval and may require additional rent payments.
- Utilities: The tenant is usually responsible for all utilities used in the premises, including electricity, gas, water and sewerage.
Clearly the conditions that the tenant will be bound to are quite different from those of a residential tenant. Since a commercial property lease is a binding legal document, it is clear that any potential tenant fully understands what hey are committing themselves to when the sign the document.
For this reason, it is strongly advised that anyone contemplating renting commercial premises has an Auckland commercial property lease lawyer look at the landlord’s tenancy agreement. Even if there is nothing untoward in it, the tenant will have the peace of mind knowing that they are protected by law, and that the landlord cannot make any sudden or unexpected changes to their terms of the tenancy.
For tenants in the area, you can talk to a commercial property leases lawyer in Auckland such as McVeagh Fleming. You can see more about them on their website.
https://www.mcveaghfleming.co.nz/property/commercial-property