Understanding a commercial viable lease requires you to know and understand the key terms and conditions contained in the understanding prepared by lease agreement lawyer. The few terms in a lease agreement are
- Lease duration and options to renew: Good Business is generally attached to premises, so it needs to be protected. The owner can ask to vacate after lease period, but if they ask to do it during the period then it is considered as breach of commercial lease.
- Rent and rent reviews\Permitted use: Rent and frequency of rent reviews need to be negotiated with the owner. A lease also includes the permitted use of premises, which should be discussed with the owner clearly.
- Costs: Negotiations should also include other costs like operating expenses, fit-out expenses, security bond, legal costs etc.
- Repair and maintenance: Repair and maintenance costs like exterior fittings, walls, air conditioner fitting, plant and their equipment should be discussed clearly with the land lord.
- Assignment and sub leasing: A landlord’s permission is needed to assign the lease to another person if you decide to discontinue your business or can no longer keep it operating.
- Default and breaches: A lease is considered default if payment of rent on time is not done. This will allow the landlord to take actions to recover rent.
- Termination: Check if there are any clauses that would allow landlord to terminate the lease early. If there are any such clauses, negotiation with the landlord should be done.
