A commercial lease is a legal contract between a landlord and a business tenant that outlines the terms and conditions under which the tenant can use the property for business purposes.
This article goes into detail on commercial leases, the key points and NSW specific legalities so you can make informed decisions about your business premises.
Commercial leases are different to residential leases. There are a few things that businesses owners should be aware of. For instance, the lease term on commercial leases is always longer, typically between 5-10 years. Whereas, for residential leases, it is a shorter timeframe. Subsequently, the rent for commercial leases is higher.
Depending on fixed increases, market rates and consumer price index, the rent can be periodically reviewed. Moreover, when it comes to additional costs such as paying council rates, insurance or maintenance charges, tenants bound by a commercial lease may be responsible for making those payments.
The business operations and financial planning of business owners can be affected by the above-mentioned things; therefore, it is necessary to stay updated about this.
Another important subject to stay updated about when you are dealing with commercial leases is legal protections and obligations. In NSW, both common law and legislation like the Retail Leases Act 1994 govern matters related to commercial leases.
There are protections that are available for retail tenants as part of these laws. Some important things to consider are the security of tenure, making good provisions, and dispute resolutions. As a tenant, you never know when things can go south. It is therefore necessary to understand legal obligations and protections.
Security of tenure is important because lease renewal terms can impact long term business stability. So, it is crucial that a business owner stay on top of their legal obligations that involve lease terms and security of tenure. Moreover, when the lease comes to an end, tenants must return the property in its original condition.
Importantly, Dispute Resolution may be necessary in case of disputes between the property owner and the tenant. Lawyers are experts in handling civil disputes for their clients and can ensure the matter is resolved in a cost-effective and time-saving manner.
