The small business specialists
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Before entering into a lease you will have an opportunity to negotiate with the landlord (or their agent) to reach an agreement that meets your business needs. It is important to understand and consider some key leasing matters before starting negotiations.
It is important to seek financial, legal and business advice before entering into a lease and that you understand your rights, liabilities and obligations.
In theory everything is negotiable. Rent, term of the lease, options to renew, operating expenses and related costs can be negotiated with the landlord. Negotiations could require you to go back and forth with the other party. Be prepared to allocate sufficient time to negotiate. Do not be pressured into signing a lease without first seeking legal, business and financial advice.
Usually a lease will be prepared by the landlord’s solicitor and contain terms and conditions that are acceptable to the landlord. The extent to which these terms and conditions can be negotiated will depend on a range of factors including:
TIP: Although a lease may be presented as 'standard’ you can still negotiate changes to this type of contract if required.
Before starting negotiations seek financial advice to work out how much you can afford to spend on leasing the premises. You should also consider the terms and conditions of the lease and what you are prepared to accept.
Think about engaging someone with experience in leasing business premises to help you negotiate your lease, particularly if you are not good in face-to-face negotiations.
Negotiating a good lease is vital to the success of your business. Some key negotiation tips include:
TIP: Make sure the other party understands that all negotiations are subject to and conditional upon the approval of your lawyer and financial adviser.
The terms and conditions of your lease are critical to the success of your business. Getting these right from the beginning will help safeguard against future problems or issues.
Generally, terms and conditions of a lease should provide:
Our publication How to negotiate your way to a better retail lease explores these matters in more detail.
Some of the key terms and conditions typically included in a lease are:
Our section on main issues to consider when negotiating a lease provides more detailed information about each of these matters - familiarise yourself with them before starting negotiations.
A lease is a contract and you will be legally required to meet the terms and conditions of the contract once it has been entered into. Before signing a lease, taking possession of the premises or paying any monies you should obtain independent legal, financial and business advice.
► Understand the main issues to consider in lease negotiations.
► Read our publications on commercial leasing.
► Read 10 tips to leasing commercial premises.
► Contact our commercial tenancy business advisers if your business is in WA.
► If your business is interstate, contact an adviser in your area.