Key things We Offer
- Focus not only on initial stages of entering into a lease, but also ensuring that the terms and conditions of the lease will facilitate, to the greatest extent possible, a workable ongoing relationship between landlord and lessee
- We understand that opportunities for securing commercial property as a lessee or a good lessee as a landlord need to be dealt with as soon as possible – accordingly, we strive to provide you with our advice as soon as reasonably practicable
- The rules surrounding Retail Shop Leases can be complex and may have a critical impact upon your lease. We will ensure that you have the advice required to comply with your obligations whether as a landlord or lessee.
Retail & Commercial Leases: Service Details
Dorrian Law can provide assistance with retail and commercial leases in a number of capacities. It is important to seek legal advice from an experienced commercial solicitor before entering a lease.
Dorrian Law can assist you with:
- Drafting and reviewing retail and commercial leases
- Negotiation for the terms of the lease (including rent, transfer options, duration, exit and renewal options)
- Subletting of premises
- Legal advice certificates
- Possible dispute resolution processes
Contact us to find out more or to arrange an appointment.
Commercial lease
Sorting out a commercial lease or seeking tenancy services that is right for you does not have to be complicated.
You can avoid the hassle of trying to figure it out on your own by consulting us for legal advice.
We offer straight-talking advice and clear templates for Qld commercial leases if you are the landlord or the tenant of any property in Queensland.
Whether you are the landlord or the tenant (of any property in Queensland) you will benefit from our straight talking advice and clear templates regarding Qld commercial leases.
Top issues to consider in a Commercial Lease
In Queensland there is no such thing as a standard Commercial Lease or Standard Retail Shop Lease. They are drafted by the lawyers for the landlord.
You will have to consider the following:
- Term / tenure– As a tenant you want to have security of tenure without committing yourself for too long in case your needs change. As a landlord you want a stable long term tenant providing rent at appropriate yield levels. Multiple Options to renew coupled with rent reviews to market rent at the time of exercise of option seem to balance the commercial needs of both the tenant and the landlord. (In Queensland if the lease term (including options to renew) is over 3 years the tenant will want the Lease registered on the Title.)
- Security– Landlords will want personal guarantees and a bank guarantee of 3-6 months rent. Tenants will want to provide less security. A rule of thumb is this – if personal guarantees are provided (and they have some value) a 3 month bank guarantee is usually reasonable. Without personal guarantees normally a larger bank guarantee is reasonable.
- Letter of Offer / Intent / Agreement to Lease– Be careful they are often binding. Take advice before signing one.
- Gross Lease or Net Lease– A “Gross lease” rent usually includes “most” outgoings. A “Net Lease” rent usually does not include outgoings. What is your understanding and what is and is not included in rent? The definitions need to be carefully looked at.
- Insurance– What insurance does the landlord take out and what insurance does the tenant need to take out? Does the Lease “require” that a tenant’s insurer will agree to certain things. Often they will not. Most Insurance clauses need amendment.
- Assignment – Are the tenant and the guarantors “off the hook” if the lease is assigned? The tenant is in limited circumstances under the Retail Shop Leases Act but not the guarantors. Most Leases need amendment on this point.
If you’re a landlord for a commercial lease
We assist landlords (across Queensland). Landlord assistance includes:
- Lease preparation
- Disclosure compliance
- Extensions and variations
- Enforcement of landlord rights including Notices to Remedy Default
- Compliance with other relevant legislation
Registered Leases
In Queensland, Leases of more than three years (or with options to renew) need to be registered on title in order to protect the term and the options.
Licenses
We also assist with car park, footpath dining and other licence agreements.
Retail Shop Leases
Our Brisbane lawyers assist tenants and landlords across Queensland with document review, amendment, preparation, advice, Notices of Default and dispute resolution.
Our solicitors will help you navigate compliance with the Retail Shop Leases Act 1994 (Qld).
If you’re a tenant in a retail shop lease
We assist tenants (across Queensland) with:
- Retail Shop Leases Act – Legal Advice Report
- Review and advice on lease terms
- Negotiation of lease terms (often with significant cost savings)
- Exercise of options to renew (which must be exercised strictly in accordance with their terms)
- Extension or assignment of leases
- Sub-leases
- Surrender of Leases
- Structuring security arrangements (security deposits, bank guarantees and personal guarantees) and your other affairs for asset protection
Commercial Lease & Retail Lease: What’s Different?
A lease is a contractual arrangement between a tenant (lessee) and a landowner (lessor). The purpose of this agreement is to set out the rights and obligations of both parties. Leases primarily state that the owner of the property will allow the use of that property by another entity for a specified time and payment. However, there are differences between types of leases depending on the purpose of your lease, especially between commercial and retail leases.
Commercial Lease
A commercial lease is an agreement for the leasing of commercial property with a specific business purpose. Typical examples include office areas, warehouses or industrial sites. Commercial leases have negotiable terms and vary from lease to lease. They also provide longer terms to ensure business engagement. Compared to other forms of leases, commercial leases offer less legal protection as the law assumes businesses and business people are more knowledgeable than consumers and lay people.
Retail Lease
A retail lease is a type of commercial lease used for retail shop businesses. Unlike explicit commercial leases, retail leases attract additional protection under State-based legislation. To determine whether a lease is a retail lease it is imperative to look to the law. Generally, a lease will be governed by the relevant State Act if the retail premises is in a shopping centre. This means that there must be 5 or more premises predominantly carrying on one or more listed businesses. Although, the Acts’ also provide exceptions as to what will be considered a retail lease. In NSW, the Retail Leasing Act 1994 will not apply to:
- Shops that have a lettable area of 1,000 square metres or more;
- Businesses managed by the lessee on behalf of the lessor;
- Shops operated within a cinema, bowling alley or skating rink by the person who operates the cinema, bowling alley or skating rink;
- Premises used only for an excluded use as defined by the Act, eg. vending machines, storage lockers, private post boxes, public telephone, public tables and seating, etc.
- Leases with a term over 25 years.
Key Differences
Even though retail leases are a form of commercial leases, the main point of differentiation is the law that governs their operation. Entering into a retail lease imposes additional obligations on the landlord covered by the Retail Leasing Act 1994, or corresponding State Acts. Conversely, commercial leases are governed by State-specific property and conveyancing laws. This focus on consumer protection of retail leases also feeds into three other differences:
- During the negotiation stage, a lessee of a retail lease must be supplied with a disclosure statement and a copy of the proposed lease. Failure to provide the lessee with such documentation will provide the lessee with a right to terminate the lease even after it has been agreed to. This does not usually occur in commercial leases until after negotiations have been finalised;
- In a retail lease, lessees are also offered protection against unconscionable or deceptive conduct by the lessor; and
- In a retail lease, as a lessor, you cannot pass the preparation costs to the lessee. Although, as a lessor in a commercial lease you may pass these preparation costs. Additionally, in commercial leases, tenants are usually responsible for the landlord’s legal costs.