Lease preparation and content

Although the Land Titles Office has a "Sublease" form which many lawyers use in their documentation, this form is not of any use on its own as it only consists if a single page. It does not contain any useful terms. When the form was introduced, some 70 years ago as part of the Real Property Act 1925, the Act contained some short form terms which could be incorporated into a lease.

Unfortunately lawyers (including our office) started to use their own terms and the short forms of lease have fallen by the 'wayside'. In many ways it is a pity. The process is being reversed at the moment as there is a trend towards shorter and 'plain language' documents.

Most lawyers have written their own leases. A lease generally consists of 'fine print' running from 12 - 40 pages.

The fact that someone has had to draw a document of this length is part of the reason for high costs. It may have taken a draftsperson many weeks to draw and it must cover all types of potential problems. If the drafts person makes an error in the drafting, the same error is then repeated for many clients. Clients and lawyers simply cannot afford those mistakes and this adds to the costs. This aspect is not often considered by clients when they are quoted a fee or they receive an account. The expectation is that you 'press a button' and it is ready. In a way that is correct, but it does not take account of the work put into the document.

As commercial rents are often much higher than domestic rent and the terms are much longer, considerable care has to be taken in lease drafting.

If a 'botch-up' is made of a lease with a $100,000.00 a year rent for 10 years, the losses to the owners / tenants (and the lawyers) are enormous. Leases for 5-10 years are common and occasionally you see a lease for 15 or even 20 years. This takes a little bit of planning and drafting. I do not wish to sound like an apologist for lawyers, but how many times have you had to plan events that may occur 10 years from now?