What you should consider before signing a Retail Lease
Firstly, when considering signing a lease it is very important to seek professional advice to avoid issues down the track. Below is a list of basic points you need to understand when considering entering into a lease:
1. Are you sure you understand the time and money commitment of your lease? It is important to have a solicitor look over your lease. This could potentially save you hundreds of thousands of dollars over the lifetime of the lease. E.g. a 5 year lease signed at $650 per week is actually close to $170,000 regardless of how your business goes.
2. Have you checked with the local council? You may need consent for certain business types or approval for a new fit out or building works or you may need to lodge a Development Application. There are a myriad of issues that may arise necessitating negotiation with the landlord.
3. Have you obtained advice about the terms of the lease? It is imperative that the terms of the lease are carefully negotiated before signing anything as once signed both parties are committed. A solicitor can help you understand what you should and shouldn’t be paying for (e.g. outgoings, repairs and maintenance etc).
4. Is your retail lease covered by the Retail Leases Act 1994? If the type of business you plan to run is listed in Schedule 1 of the Act your lease will be covered under the Act. Even if your business type is not listed it may still be covered under the Act if it is located in a shopping centre. You should seek advice about whether your business is included or exempted from this list. The Act covers many aspects of the tenant/landlord relationship. It is important that you are aware of the key points legislated in the Act and also what rights and responsibilities you have.
5. Are you aware of the relevant points addressed in the Retail Leases Act 1994? The Retail Leases Act 1994 includes but is not limited to the following:
What shops are included and excluded from the Act
Leases to which the Act does not apply
Application of the Act to short term leases
When does the lease commence
Minimum term of the lease
Rights regarding fit-out and building costs
Right to compensation for pre-lease misrepresentations
Lease preparation fees
Contact firstname.lastname@example.org for advice on your retail shop lease.