How Lawyers Assist You Negotiate a Commercial Lease


It’s been a tough year for retail in Sydney. With the pandemic restrictions and lockdown, many retailers, big and small, have had to close their doors. Many landlords have been lenient with rent; others have added an extra year to leases if tenants are unable to pay rent during the pandemic years of 2020-2021. One thing is certain; the retail landscape has forever changed.

In Christmases past, retailers in shopping centres have kindly given lavish gifts to their Centre Management teams at Christmas. Some tenants gift lavish presents to gain favour with the Centre Management team or Leasing Manager with the view that this can give them an edge when renegotiating your lease upon renewal.

It may be wiser to engage a lawyer specialising in commercial and property law instead. Property lawyers typically negotiate terms in a commercial lease; they do not negotiate rent as this is a commercial consideration between parties. However, there are ways in which a commercial lease lawyer can assist with your lease renewal.


5 ways a lawyer can assist you with your lease renewal

1. Rent
Your property lawyer will be able to go through with you the number of ways rent can be derived and if this will suit your business. For example, a small base rent with a percentage of sales may work for some retailers but not all.

2. Fit-Outs
Most lease renewals require a fit-out as leases typically span 5 years; a store refresh can keep customers interest. A lease incentive to help with the fit-out, such as a rent-free period or a contribution to assist with the fit-out cost, may be part of the negotiation.

A property lawyer can assist you in understanding how the lease apportions these costs. They can also ensure that the agreement permits you to carry out work that may constitute an alteration to the store.

3. Make Good and Refurbishment
At the end of a lease term, tenants are often required to bring the tenancy back to its original condition – make good. If re-carpeting, re-tiling or re-painting is necessary near the lease line of your store-front, you may be required to pay for these services. A seasoned commercial lease lawyer will be able to assist you in negotiating a fair term.

4. Term
Landlords, the lessors, will often require a longer lease term. However, when the shopping centre is about to undergo a development, lease terms as short as 6 months can be offered. A lawyer with knowledge of the current market, will negotiate a lease term that will suit you and give you a thorough understanding of any clauses to your lease term should the centre undergo a development.

5. Operating Expenses
Outgoings or operating expenses are typically paid by tenants. A commercial property lawyer will be able to guide you on what tenants usually pay and what proportion, if any.

Lease renewals are a significant undertaking and it must meet your commercial interests. Professional help is at hand with your retail lease negotiations, our experienced property lawyer at TY Lawyers is ready to lend a hand.

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