Commercial Lease questions - Newbie

Discussion in 'Commercial Property' started by travisdj, 30th Jun, 2011.

  1. travisdj

    travisdj Member

    Joined:
    30th Jun, 2011
    Messages:
    1
    Location:
    sunshine coast, qld
    Hi, my wife is set to sign a commercial lease agreement in state of QLD and am wondering if some of the clauses are standard as the rental company say they say they are.

    Is it standard that:

    You have to repaint or pay for painting upon leaving the agreement - when you opt to move out?
    We have to pay for the agreement to be drawn up and any editing of it during the life of the lease?
    Do you have to pay for all services in relation to the use of the property? Electricity, council rates, building insurance, water. I can understand rates, water, and electricity, but I thought building would be the owners?
    They also want to back date the lease because they only just sent it out even though it was up for renewal almost a month ago.

    Any advice from somebody whom deals with or has gone through this would be helpful. Thanks
    Travis
     
  2. Scott No Mates

    Scott No Mates ...and people wonder why?

    Joined:
    25th Jun, 2011
    Messages:
    5,391
    Media:
    144
    Location:
    Sydney - LNS
    Commercial leases

    Everything is negotiable.

    I am slightly confused, you say that the agent is backdating the lease however your wife is a sitting tenant, on holdover.

    As the agent is keen to get the deal done, you should make as many noises about leaving as possible (but suss out the local market first so you can get somewhere within the month). Negotiate hard on the make good clause and limit it to patching not a full repaint, outgoings - what is she paying for at present? and the list goes on.
     
  3. Focus

    Focus Broker

    Joined:
    23rd May, 2011
    Messages:
    17
    Location:
    Perth
    Would have to agree with the agent about most of the clauses you have highlighted. Who pays the building insurance has been debated with a number of my commercial clients and most choose to not to pass it on to the tenet. The main concern is if it wasn't kept current (for a number of reasons) and that not all policies have the same cover. You might be able to try and get out of that expense!!
     
  4. Bird Dog

    Bird Dog Member

    Joined:
    31st May, 2010
    Messages:
    259
    Location:
    Melbourne
    That looks pretty standard I'm afraid Travis.
    If it's office in QLD, she may have an opportunity to negotiate as I hear it's pretty depressed up there but I will warn you that if she walks, she'll very likely come across exactly the same terms on the next place.

    Regarding the back dating, this may be so they confirm she is accountable for the last months outgoings.

    Good luck

    B.D
     
  5. Dazz

    Dazz Banned

    Joined:
    10th Jan, 2009
    Messages:
    8,029
    Location:
    Australia
    Ahhhh, the most powerful word in any negotiation....

    "this is just standard" - no worries - where do I sign then ??

    Everything is negotiable in a commercial Lease.

    If you don't wish to agree to the Owners terms, then pack up and leave. Too easy.
     
  6. chilliblue

    chilliblue Member

    Joined:
    29th Jul, 2010
    Messages:
    1,685
    Location:
    AUstralia
    "If you don't wish to agree to the Owners terms, then pack up and leave. ".

    You know, I love watching the tenants mouth drop whenever I say the above.

    Commercial tenants often come to the bargaining table thinking that they have the upper hand and that is not always the case.

    Yes in many instances you will have to repaint or pay an amount upon leaving.

    No, you should not normally be responsible for the drawing up of a lease so long as the lessor issued you with a standard memorandum (draft lease) along with a Heads of Agreement (letter detailing the terms ie. rental amount, term etc).

    However, if you have the above and have come to an agreement and then want to change said agreed terms, then those are your costs.

    The services that you mentioned are called outgoings and are normally paid if you have agreed to a nett rental. The owner will need to advise you at the beginning of each financial year of the proposed costs for the next 12 months and then audit the figures at the end of the financial year.

    Otherwise, said costs are bundled into your rental and this is called a gross lease.

    The back dating of the lease can be used as a leverage.
     
  7. cu@thetop

    cu@thetop Member

    Joined:
    27th Feb, 2008
    Messages:
    1,824
    Location:
    Brisbane
    Not much discretion if a renewal and she's exercised the option. The time to negotiate was before the expiry of the option exercise date or in fact when the lease was first entered into.

    Otherwise: what Dazz says.