Are you the tenant or landlord of a commercial lease. Don’t fall into the trap of not having your lease reviewed
Are you a landlord or a tenant of a commercial property? When was the last time you checked the details of your lease?
Commercial Leases. They are seemingly easy to set and forget. But what things should be routinely checked under the Lease to ensure validity of the Lease?
Examples of things that should be checked are:
If the tenant or landlord is a company named in the Lease, is that company still registered? If they are not, then there is no legal entity to the lease. There is risk if the tenant company is no longer registered and payments are not made under the Lease, because there is no legal entity to recover unpaid monies from.
If the tenant is a company, have there been any changes to the directors of the company? Has there been any changes to the tenant company shareholding, meaning there has been a change of effective control? If there are guarantors under the lease, should the new directors be added as guarantors under the Lease?
Is the security deposit being held in accordance with legislation?
Have all the notice requirements been complied with for rent reviews or options to renew?
Has an updated Disclosure Statement been provided to the tenant before a renewal, particularly if there have been material changes to the amount of outgoings payable under the Lease?
For landlords and tenants, have there been any changes to insurance policies which may not cover you in the event of a claim?
Tenants, if the property is mortgaged, did the landlords bank provide consent to the lease?
Have there been any changes to Council zoning which may impact the permitted use of the premise?
If any of the points above made you go ‘hmmm’ or you are unsure, you better call Trish!
Leases are often forgotten about once they are in place...until something happens! And then it costs more time and money to try to resolve the issue! Having a properly prepared Lease to begin with is crucial to protecting your rights, whether you are a tenant or landlord. Having your Leases prepared right or reviewed periodically gives you peace of mind and protection.
If you need assistance with any Lease or would like to have yours reviewed, contact our office. Trish is one of few Accredited Property Law Specialists in Victoria, so anything Lease related, she’s it!