Tenants' Page - Commercial Property Leasing

Firstly, the introduction of the Commercial and Retail Lease Code of Practice in 1995 and secondly, the deteriorating ACT economy. This has meant that owners are willing, probably the first time in at least 20 years, to negotiate terms with tenants.

This does not however mean tenants should be relaxed. The worsening economic situation means that owners are under a lot of pressure and tenants should be even more vigilant in their commitments.

The first rental for most people is on the commencement of a new business. In my experience owners and, especially tenants, expect to be in the premises and making money 'yesterday'.

You need to take time to properly negotiate a lease to ensure that some remnant of balance is achieved between the owner and the tenant.

The owner is obligated to give you a Disclosure Statement at least 7 days before a lease is signed, but you should have a blank form of this Statement with you as soon as you commence negotiations. This way you can discuss matters which need to be included in the Statement. If you would like to see the Statement as soon as you start planning your business venture, please contact us.

The Disclosure Statement form is prescribed under the Code and it should not be modified without reference to a lawyer and any significant agreements or representations by you or the owner should be noted on the last page of the Statement.

The Statement should be signed by the owner first and then presented to the tenant. As the Disclosure Statement is the foundation for the lease itself, the Statement should be checked by your lawyer before you sign it.

You should also ask for a blank copy of the lease which the owner will eventually ask you to sign. If you receive both these documents early in the negotiations, then you are in a much better situation to decide whether you wish to take the premises AND you will be able to look through them in your own time and save on legal costs. It is also better from a lawyer's point of view because he can more fully discuss the lease with you. Don't be frightened to look at the lease. They are not as bad as they look. Most leases are now drafted in plain English.

Commercial leasing procedure is now premised on disclosure by the owner as well as by the tenant. Each party is generally responsible for their own costs and the owner must pay government Stamp Duty.