Most new business owners and entrepreneurs have certain perceptions about leases. Firstly, leases are all “standard”. Secondly, leases are “non-negotiable”. These are misperceptions.
Leases may look similar but if you read in between the lines, you will likely uncover issues or “nasties” that you do not expect and will probably not be comfortable to accept.
It is also not true that all landlords will not agree to negotiate certain amendments to their standard leases. From our experience acting for tenants (including new tenants who purchased an existing business and an assignment of the lease is involved), most landlords are prepared to understand the tenant’s concerns and to negotiate mutually acceptable changes to the leases (noting that most of the leases are standard leases prepared by the landlord’s lawyers and the landlord may not be fully acquainted with the provisions of the lease).
Meritus Legal acts for landlords and tenants in commercial leases (including “retail shop” leases). We assist landlords of commercial properties to prepare standard leases, negotiate with tenants on the tenants’ requests for certain changes to the lease, drafting variations to the lease, advising on extensions of lease and drafting deeds of extensions.
We also assist landlords and property managers at the “sharp” end of the lease where the tenant breaches the lease, including issuing notices of default, terminating the lease or working with the tenant to surrender the lease and premises.
We assist tenants in reviewing their draft leases and advising them of the risks and obligations under the lease. We often assist the tenants to negotiate appropriate amendments to the lease so that the lease will be fairly balanced.
It is important that you understand your obligations under the lease and it is prudent to think through the possible scenarios that may occur. We have seen many situations where the tenants defaulted on their leases and had to face serious consequences (legal and financial). It will be a costly and stressful affair if you breach the lease. The best way is to minimise the risks by understanding the lease and negotiating a mutually acceptable lease. Prevention is indeed better than cure.