Commercial leases are an important aspect of a business plan. A well negotiated commercial lease can mean the difference between a business's success or failure. However, there is a range of factors that need to be accounted for before you put pen to paper.
Furthermore, you should never enter into a lease agreement without full knowing all of its terms and clauses. To attain a full understanding of your commercial lease, you should seek the advice of an experienced property lawyer.
But to help broaden your understanding, this article sets out the two issues to contemplate when negotiating a commercial leasing agreement for your business.
A leasing agreement can be an essential part of your business's success.
Types of leases
A commercial lease is a legally binding document that determines and governs your rights and responsibilities as a tenant in relation to a property. However, there is a variety of different types of leases available to business owners.
Generally, the Queensland government categorises commercial leases based on the length of time they are binding.
Short-term leasing allows businesses who are targeting swift growth to move to a bigger location if they outgrow their current premise. However, the downside of a flexible short-term contract is that a landlord can often require the tenant to vacate the premises little notice. This could interrupt your business plan and growth strategy. You should also take accounting and financial advice about your businesses ability to meet its obligations under the lease.
A long-term leasing agreement is an alternative that offers businesses a stable platform to grow their brand and consumer base. For this to be a viable option, you will need to find a location that is representative of your target market.
However, long-term commercial leases tie you to a series of rights and obligations that can lead to significant financial and legal repercussions if you need to terminate the contract early.
Terms of a lease
When negotiating a lease it is important to consider the terms that will govern your possession of the property. As this is a legal document, the negotiation process should be led by someone who has expertise in this field.
A specialist property lawyer can explain to you each of the commercial contract's clauses and help you negotiate leasing terms to fit your business's needs.
The Queensland law society emphasises a range of terms to consider, these include:
- The lease's duration and right to renew;
- The rent review process;
- Your rights if the property is damaged;
- The consequences of failing to pay the rent.
A leasing agreement is more than a legal document – it is a platform for the success of your business. To make sure your interests are safeguarded, contact a team of experienced property lawyers today.