COMMERCIAL LEASES

A commercial lease is a legal agreement between a landlord and a tenant in which the tenant pays rent in exchange for the right to use the landlord’s property for a business purpose. This can include retail stores, offices, and warehouses, among other types of properties.

When negotiating a commercial lease, it’s important to consider the length of the lease, the amount of rent and any increases over time, the terms of any option to renew, the rights and responsibilities of both parties, and any other terms and conditions that may be relevant to your business. You should also consider any potential liabilities or obligations that may arise under the lease.

Common disputes arise in commercial leases over:

• the amount of rent that is due, the timing of rent payments, and the calculation of rent increases;
• who is responsible for maintaining and repairing the property, as well as the standard of maintenance required;
• the termination of a lease, including the grounds for termination and the timing of the termination;
• the tenant’s right to assign or sublet the property;
• the tenant’s right to make alterations or improvements to the property, as well as who is responsible for paying for these changes;
• the use of the property, including the types of businesses that are allowed to operate on the property and the hours of operation.

As a tenant, it’s important to carefully consider whether or not to provide a personal guarantee on your lease. A personal guarantee is a legal agreement in which you personally assume responsibility for the debts or obligations of your business, including any unpaid rent or damages to the property. While this may seem like a way to protect your landlord, it can also be risky for you as the tenant. If your business is unable to meet these obligations, you may be held personally liable and required to pay out of your own pocket.

Before making a decision, it’s important to weigh the potential risks and benefits of providing a personal guarantee. If you are a small business owner or are unsure of the financial stability of your business, it may be in your best interest to avoid providing a personal guarantee. Protecting your own interests is crucial in any lease agreement, and a personal guarantee should not be taken lightly.

As a tenant, if you have a problem with your landlord, it’s important to communicate your concerns and try to resolve the issue through negotiation. This may involve discussing the matter directly with your landlord or mediating through a third party. It’s important to remain respectful and professional throughout the process, as finding a mutually beneficial solution can often be the fastest and most effective way to resolve the issue.

If negotiation is not possible, you may need to seek legal assistance to protect your rights and interests. An experienced lawyer who specialises in commercial leasing can provide you with valuable guidance on your options and how to proceed.

At Axe Legal, we have a team of experienced lawyers who are dedicated to providing expert legal support throughout the leasing process. From negotiating and drafting leases to resolving any disputes that may arise, we have the knowledge and resources to protect your interests.