Commercial and Retail Leasing

We draft and negotiate commercial and retail leases, principally for landlords, and review leases for tenants who want a considered opinion before signing.

Leases for landlords

Most precedent leases are drafted for balance, which in practice means the landlord carries more risk than necessary. We draft to hold the line on the provisions that decide what happens when a tenancy goes wrong:

• Rent review. Mechanics that actually work, including what happens if a review is missed, and ratchet provisions where they are permitted.
• Default and termination. Clear triggers, workable notice periods, and re-entry rights that can be exercised without argument.
• Security. Bank guarantees rather than cash where possible, in an amount and for a term that survives the end of the lease, with a clear right to call on them.
• Personal guarantees. Drafted to survive the corporate tenant's failure, which is the only circumstance in which they matter.
• Make good. Obligations that are specific enough to enforce, and that survive expiry rather than evaporating with it.
• Outgoings. What is recoverable, how it is estimated and reconciled, and what happens on a dispute.
• Assignment and subletting. Consent conditions, and whether the outgoing tenant and its guarantors are released.

Retail leases are different

Where premises fall within the retail leases legislation, a significant part of the bargain is set by statute rather than by the document. The landlord cannot contract out of it. That regime affects disclosure before the lease is entered into, what outgoings may be recovered, how rent reviews may operate, minimum terms, and the landlord's obligations on repairs.

Whether a particular tenancy is caught is not always obvious, and getting it wrong is expensive because the statutory provisions override the drafting. It is worth settling that question before the lease is prepared.

Incentives

Rent free periods, fitout contributions and cash incentives should be documented separately from the lease, with clawback provisions if the tenant defaults or leaves early. An incentive granted without a clawback is simply a discount.

Tenant-side reviews

We do not usually act for tenants in negotiating against landlords we might otherwise act for, but we will review a lease you have been handed and tell you plainly what it does. The points that most often warrant attention are the term and option mechanics, the rent review basis, what outgoings you are agreeing to fund, the make good obligation and what it will cost at the end, the guarantee being asked of you personally, and the assignment provisions that determine whether you can ever sell the business operating from the premises.

Disputes

We act on rent arrears and recovery, breaches and termination, make good disputes at the end of a term, outgoings disputes, and disputes about the operation of an option or a rent review.

This page is general information. It is not legal advice, and whether the retail leases legislation applies to your premises will change the answer.