Do I need a lawyer for a lease agreement?

The terms, scope and complexity of a lease can vary depending on how the lease has been drafted. Having a lawyer review a lease for you and recommend changes on your behalf, is critical to ensure the rights and responsibilities of a landlord and tenant are reasonable.

A lease is a legal document that regulates the relationship between a landlord and a tenant concerning a property or retail premises.

A lawyer will review and may negotiate with the other party some of the common clauses as follows:

Rent

To ensure that the proposed rental amount is in accordance with similar properties in the area and does not exceed a reasonable amount in respect of the condition and facilities contained in the premises.

Outgoings

To determine whether you will be liable for outgoings under the lease and if so, what type of outgoings and the relevant percentage amount. Generally, if the tenant is not required to pay any outgoings the rent will be greater than expected.

Rent review

To identify what method of rent review is reasonable and, in your favour, taking into account your circumstances. There are three methods of rent review, a market review, a fixed percentage annual increase and an increase in accordance with the consumer price index (‘CPI’).

Security deposit/bank guarantee

To review, remove or decrease the relevant security deposit or bank guarantee amount a landlord may require under the lease as security.

Guarantee

To confirm if the landlord requires a personal guarantee by the director(s), where the tenant is a company. A guarantee provides extra protection for the landlord, as the directors will guarantee the obligations of the tenant company under the lease.

Make good/reinstatement

To review the terms and scope of the make good clause at the conclusion or earlier termination of the lease. These clauses can often involve significant costs to the tenant such as removal of a fit out, where you are required to restore the premises to the condition as at the commencement of the lease.

Consulting with an experienced commercial lawyer can help you avoid potential pitfalls that are often disguised in leases and help guide you through the lease negotiation process and ensure that your lease is in your best interest.

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