5 Considerations When Entering into (or Exiting) Residential, Retail or Commercial Leases

Knowing what to look for when entering into a lease, whether it be residential, retail or commercial, is sometimes confusing. To simplify we have outlined below the following things to consider.

Residential

1. Tenants are required to give landlords 14 days’ notice to vacate prior to a fixed term expiry date
2. Tenants are required to give landlords 21 days’ notice to vacate after a fixed term expiry date
3. Tenants can give landlords 14 days’ notice to vacate during a fixed term expiry date if the landlord fails to notify intention to sell the property prior to entering into a lease.
4. Landlords are required to give tenants 30 days’ notice to vacate prior to a fixed term expiry date
5. Landlords are required to give tenants 90 days’notice to vacate after a fixed term expiry date

Retail

1. Rent is charged per metre squared per annum and defined as Net Lettable Area
2. As of 1 July 2017 there is no minimum term required for a retail lease
3. The landlord cannot rescind an offer to lease upon the issue of a Lessors Disclosure statement, the tenant can (unless a lease is signed and given 7 days to cool off).
4. If a Lessors Disclosure Statement has misleading information or is incomplete the tenant may terminate their lease within 6 months of commencement
5. A landlord will typically consider a retailers former business success, financial stability, lease history and suitability to the existing tenancy mix prior to entering into a lease.

Commercial

1. Rent is charged per metre squared per annum and defined as Net Lettable Area
2. Various ways to charge the rent;
3. Face Rent (advertised)
4. • Net Rent (Excluding building outgoings)
   • Gross Rent (Including building outgoings)
   • Effective Rent (Net of Incentives)
5. Access is typically granted when a landlord receives;
   • a signed lease
   • 1 month’s rent in advance
   • a bank guarantee
   • a certificate of insurance
6. A lease proposal (or Heads of Agreement) is a show of good faith and not a binding contract
7. The tenant typically pays the Landlord’s and their own legal costs, except under RLA (Retail Leases Act)

Written by
James Maxwell
Senior Leasing Manager
james@roseandjones.com.au