A lease is a serious long-term financial commitment, sometimes stretching into the hundreds of thousands of dollars over the term of the lease.
Prior to agreeing to any lease, we recommend that you obtain professional accountancy and taxation advice to ensure you understand the full extent of the financial commitment you (or your business) is making. You should seek, as a minimum:
- taxation advice, particularly whether your entity is the most tax-effective entity to contract in and any GST implications; and
- financial advice as to what you can afford and your financial obligations under a prospective lease.
It is also prudent to consider your business requirements; particular considerations may be:
- whether the intended leased space suits the needs of your business, both now and in the immediate future;
- the types of customers targeted in the leased space – i.e. foot traffic;
- whether any changes are required to the leased space for installation of your desired fit out;
- whether the Landlord will agree to the term of lease required; and
- whether the Landlord will contribute to the fit out of the leased space.
It is important to always receive legal advice on your obligations under a lease along with the potential consequences of not meeting such obligations (if you are leasing a retail premises, you are required to obtain legal advice prior to signing the Lease).
Your solicitor should advise you in respect of (non-exhaustive list):
- if a retail shop lease, each of the items contained in the Legal Advice Report;
- the term of Lease and any options to renew (and the terms of such);
- the permitted use of the leased space;
- rental and how rent is reviewed;
- outgoings and utilities obligations;
- your insurance obligations;
- any security (i.e. cash deposit) required by Landlord;
- your ability assign or sublease;
- your obligations at the end of the lease term;
- any relocation or demolition provisions; and
- the Landlord’s obligations.