The time to be clear about expectations is at the front end when the Lease Agreement is being negotiated. There is no such thing as a Standard Commercial or Retail Shop Lease. So therefore you have to read the document (and it is usually a doorstopper) carefully and take some advice on the document before you sign it.

A good leasing lawyer should be able to walk you though a Commercial Lease or a Retail Shop Lease in a couple of hours providing you with a “high point” or “big ticket item” advice and suggested amendments on the issues that usually bite tenants. Yes this will cost you something. However, some wise experienced insight is usually worth its weight in gold.

We provide a fixed fee High Point Review and Advice Conference (face to face or by phone) for all Queensland Commercial and Retail Shop Leases. Contact us now for a Quote.

These tips are relevant for a Retail Shop Lease and a Commercial Lease. Our lawyers (solicitors) advise on on Retail Shop Leases and Commercial Leases Queensland wide.

Bond / Bank Guarantee / Security Deposit

Usual commercial practice sees landlords requiring a bond / security deposit from the tenant of 1 – 6 months rent.

The bond is usually provided by way of a Bank Guarantee. A Bank Guarantee is issued by the tenant’s bank in favour of the landlord and is an unconditional order to pay when it is presented by the landlord to the bank. The tenant gets no say about whether the bank pays out on it or not. Your bank will charge a fee to issue the bank guarantee, an annual fee to maintain it and will usually require some security.

Personal Guarantees

A landlord will usually ask for and insist on personal guarantees from the directors and possibly shareholders of the tenant company. Take care before agreeing to these as liability under them can arise years later when you thought the lease was all done and dusted. Consider offering a larger band rather than giving personal guarantees.

Lease legal advice

Need help? Our Property Law and Leasing team (of lawyers / solicitors) now offers a fixed fee High Point Lease Review and advice conference (in person or by phone) for leasing Queensland wide. This can be done same day if needed. Contact us now for a fixed fee quote.

Negotiating lease terms for your business, be it a retail shop lease or a commercial lease (a warehouse, a factory or so office space) can be a minefield. Our lawyers (solicitors) advise on Retail Shop Leases and Commercial Leases Queensland wide.

The agent works for the landlord

Firstly remember that the letting agent works for the Landlord and once the Lease is signed the agent is gone on you are left with the landlord.

Having said that the agent gets paid if they are able to facilitate an agreement between you and the landlord so they will generally work hard to try and strike an agreement.

Take care about “Agreements to Lease” or “Letters of Intent”. They can easily be binding which means that you will be left with little room to negotiate when you are presented with the 30-50 page lease document. Ask our Property Law team of lawyers (solicitors) to have a look at it before you sign it and suggest some changes to ensure that it is a statement of intention only and not a binding Agreement to Lease.

Some threshold questions for the letting agent

• What rent are other tenants paying in the building? If they are registered leases, this is a matter of public record.
• What incentives is the landlord prepared to offer?
• Will my intended use be permitted as of right under town planning constraints for the premises?
• Has the site or the premises been affected by flooding?
• Are there any road widening proposals affecting the site?

Now usually the formal lease document will say that you have not relied on any representations the agent has made but at least you may be altered to matters that will require some further due diligence by you.

Quiz other tenants

If there are other tenants in place in the building, try and have a chat to other business owners and ask questions like:

• Is the landlord a reasonable person?
• Does the landlord take concerns from tenants seriously and respond to those concerns with action in a timely manner?
• Is the landlord spending money on the upkeep of the building?
• Are you happy in this building?

Stay tuned for more leasing tips.

Need advice on a Lease? Ask us for a fixed fee High Point Advice conference with one of our property lawyers (solicitors) – advising on Retail Shop Leases and Commercial Leases Queensland wide.

Here are some suggestions for landlords and tenants of flood effected commercial properties seeking to know what to do next.

Notices

If you are the tenant, have you notified the landlord? Make sure you do it in writing and in accordance with the notice provisions in the lease agreement.

If you are the landlord, have you notified the tenant about what your expectations are? There are many disputes that can be avoided if there is early communication about expectations.

Lease

Carefully read your lease agreement (and any amendments to it). Highlight any clauses that you think might be relevant. This will allow you quickly draw these to the attention of your solicitor.

Repair covenat

Is the lease agreement clear on who has to do the repairs in the event of damage by flood?

Time limits

Be careful about time limits. Do repairs have to be done in a certain time?

What are your rights if the repairs are not done? Are there then rights of termination?

Swift legal advice will be needed on this so that you do not potentially waive rights of termination by inconsistent conduct.

Insurers

Who took out the insurance (the landlord or the tenant) and has the insurer been notified? It may be that different policies will respond to different losses. For example the building cover may not extent to parts of the fit out.

Rent holiday

Does the lease agreement provide that rent (and outgoings) abate (cease) or partially abate? Do you have to do anything to make sure this happens? (e.g. give a formal notice)

Our leasing lawyers can help

Our Commercial Leasing Lawyers and our Dispute Resolution Team can help. Please call our Brisbane office on Ph 07 3252 0011 if you would like to book a teleconference or meeting with one of our lawyers.

From December 1 2009 the Retail Shop Leases Registry and Tribunal will be amalgamating into the Queensland Civil and Administrative Tribunal.

Until then the Retail Shop Leases Registry and Tribunal will continue to handle any matters under the Retail Shop Leases Act (Qld).

Need help with a Retail Shop Lease or a Commercial Lease? Contact Dave Cheng.