Andrew Seton Property Lawyers | Property Law Auckland
Property & Conveyancing
Purchase of House
Sale of House
Purchasing off the Plans
Subdivision of Land
Business Sales and Purchases
Wills & Estate Planning
Will Information Pack
Enduring Powers of Attorney
Blog & Advice
Business Sales and Purchases »
Matters to consider:
Come to us before you sign any documents. Let us review the Agreement to Lease terms before you commit.
As part of your due diligence in regard to whether the premises are appropriate you should talk to current and former tenants to see if the building leaks or has other problems.
Visit Council to check on building records and to see that your business use is permitted in the zone.
Check with valuers and agents as to the rent prices in the area. Maybe your rent is low and will shoot up at the next rent review.
Try to negotiate CPI rent increases only. Normally commercial leases are reviewed every two years.
Check on the outgoings costs : Council rates and Building insurance. If there is a Body Corporate then what is the levy and have a look at the Body Corporate minutes for the past two years to see what remedial works are proposed. Anything significant will put upward pressure on the rent.
Try to get the landlord to agree to meet his own legal costs on the lease and future renewals.
If the landlord is desperate to find a tenant suggest a rent holiday for a few months.
Get early approval from the landlord for any works you plan to do to the building. If you might need Council permits for works then investigate at Council. Don’t start work until the lease is signed.
Make sure the lease has plenty of years left to run, the longer the better for your business’ security. Negotiate additional renewal terms.
Avoid accepting any demolition clauses – they are goodwill killers if you try to sell the business.
Try to have a clause in the lease whereby the landlord will not lease any adjacent or nearby premises to any business which competes with your business. You will have to make a list of likely competitors that you don’t want.
If renting food premises in a mall situation be very careful about menu exclusivity and who can sell what.
Negotiate signage issues with the landlord as this is crucial for advertising.
Understand what work you will have to do when you leave the building – repaint etc.
Prior to signing any agreement to lease negotiate with the landlord to paint, repair or refurbish the building etc as required. Any agreement reached should be recorded in writing.
Remember that when the lease has been signed and you are a tenant you will in the future (at the right time as set out in the lease terms) need to give written notice to the landlord of your wish to renew the lease for the next term.
Read the Deed of Lease !!