Excited about deciding to start a new business and wanting to open the door as soon as possible, many new business owners rush to find a lease without having to spend time understanding exactly what they are committed to.
If you want to sign a lease, here are five important things you should know before putting a pen on paper.
Important lease terms to check before signing
Conditions
Your lease will have specific terms for the property. When reviewing a lease, take a look at the features below and make sure you are satisfied with what is mentioned:
Duration / Term of Your Lease - When does the lease start and when does it end?
Options to renew or extend the lease and for how long, plus how and when to apply
Termination of the initial lease and under any circumstances
Authorized use (considering whether it is large enough for your business to change as much as possible) and any restrictions on the products or services you may offer
Monopoly (No other business can sell the same goods/services as you do in the same retail store)
Do well at the end of the lease
The ability of the landlord to terminate your lease on time if they decide to redevelop the property
Rent
How much do you have to pay
Basis and frequency of reviewing/adjusting your rent (e.g. annual review, CPI, fixed percentage, rental market review)
Free-rent (for example, during the period you are fit)
Other expenses
Departure and other accommodation - What you have to pay and what the landlord has to pay (including estimated cost for the year)
How much will these costs require of you?
How these expenses will be adjusted each year based on the statement to be provided to the tenant (annual report shows actual expenses incurred in a specific period from the end of the financial year and budget) Expenses for the start of the financial year)
When did you enter into the lease?
Under the 1985 Tenancy Act, you rent when you have:
Occupied the premises or
Started paying rent or
The lease is signed by you (as the lessee) and the landlord.
Before completing these tasks, you should make sure that you have fully reviewed the lease and sought legal, commercial, and business advice on any areas that you do not understand or need clarification. It is important to ensure that the lease reflects Your negotiated agreement.
Your Landlord Duties to You
For a legal lease, at least 7 days before renting, the landlord must provide you with:
A presentation statement
Suggested Rental
Tenant Guide
Costs as items of the current year (operating expenses) for the premises
This statement includes important financial information such as rent payments and other obligations. As a tenant, pay close attention to the details of the disclosure statement and make sure it contains all the information, benefits or commitments made by the landlord or their agent that can contribute to the decision. Yours for renting this special business location.
If not covered by the law, ask for a material disclosure of the premises and the proposed lease and item costs for the year.
State Government Requirement to Reject Retail Rental Conditions
There are important requirements covered by the law that the landlord is required to comply with (and waive any contradictory terms in the lease). These include:
Property Repair and Maintenance (Shopping Center)
Provide annual audit report (in most cases)
Cover personal legal costs in accordance with the law
Send you reminders as tenants to apply for renewals and options
Paying for advice is worth it
Getting professional advice is important!
Signing a lease is a legal obligation and a serious financial commitment. Take the time to review the lease closely and ask any questions before you sign the dotted line.
An attorney can help you understand, review and negotiate your lease and ensure that all terms and conditions are in accordance with the law and compliance. If you do not have a lawyer, read your support group's guide on how to find the right lawyer to help your business.
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