Leasing a commercial property
Entering into a lease
A lease is considered to have been entered into when one or more of the following have happened:
- the lease is signed
- the tenant takes possession of the leased shop
- the tenant starts to pay rent under the lease
Lease preparation expenses
You may be expected to pay fees for any of the following services that are incurred during the preparation of the lease:
- the negotiation, preparation and execution of the lease
- obtaining consents from mortgagees or government agencies
- any surveys or compliance with a requirement made by or under an Act
Also check the landlord’s disclosure statement for further charges, or the method of calculation.
The term of a retail shop lease including extensions or renewals must be at least ﬁve years.
If you want the total lease term to be less than ﬁve years, you must have written certiﬁcation from a legal practitioner.
The Business Tenancies (Fair Dealings) Act does not apply to retail shop leases less than six months, where there is no right for the tenant to extend the lease, or to leases for 25 years or more.
Option to renew
An option to renew a lease gives the tenant the right to remain in the retail premises after the original or previous lease term expires.
For example, you may be offered a 3 x 3 x 3 lease. This means the ﬁrst lease term is for three years, but you have the option to renew it for second and third three-year periods, for a total of nine years.
Last updated: 23 July 2015