Retail Shop Lease Lawyers
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).
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.
1. 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.)
2. 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.
3. Letter of Offer / Intent / Agreement to Lease – Be careful they are often binding. Take advice before signing one.
4. 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.
5. 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.
6. 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.