A retail lease is used to outline the terms for a lessee, the party leasing the premises, and the lessor, the landlord for a property for a defined period. In most circumstances, there is monetary consideration, and the lease ensures that all the party’s rights and obligations are reserved.
The lease sets out the following:
- The Parties
- The term
- The consideration payable
- The premises
- Potential renewals
- The relevant laws applicable
The Law
In New South Wales, leases are governed by the Retail Lease Act (NSW) which covers leases for most shops in New South Wales. This act ensures that the Lessor gives the Lessee valuable rights which protect their interests. If there is a breach of the Act, then there may be an option for compensation and to break the lease.
Preparation of the Lease
You may think about what goes into preparing the lease? Or who does it? Well, the job is mostly left to solicitors to review the lease for the parties to ensure that the client’s best interests are paramount. The steps below outline from beginning to end what happens:
- Usually, an agent will prepare what’s called a Head of Agreement which outlines what the parties have agreed to with the agent. This agreement includes all the vital information that is sent to the Lessors solicitor to prepare a Lease. The solicitor for the lessor will then discuss with their client the terms and obligations.
- The Lessors solicitor will then forward a copy of the Lease to the Agent, along with a Lessors disclosure statement. This outlines key information for the Lessee to know. This is signed by the Lessor and the Lessee signs this Disclosure Statement to confirm they have been notified of any relevant information. This Disclosure Statement can be found in the link below.
Lessor and lessee’s disclosure statement | Small Business Commissioner (nsw.gov.au)
- Next the Lessee’s solicitor will review the Lease and confirm the details with their client and the Heads of Agreement. They will ensure that their client’s interests are at heart and that the client knows of all the clauses in the Lease that could impact them on default. If there are changes to be made, this will be requested from the Lessors solicitor, and once the Lessee is agreeable to signing the lease, they will sign it and forward the original back to the Lessors solicitor.
- Once the Lessor’s solicitor has received the signed Lease, they will review the lease and then get their client to sign the lease. The lease is then registered on the title of the property through the PEXA platform. This then ensures that if any dealings are had on the title, all parties dealing with the property will be aware of the lease, protecting the lessee’s interests.
There are thousands of leases in place all across New South Wales, these ensure that agreements are held in place and that the parties have bounds to their lease agreement.
RN LEGAL has assisted many clients with Lease concerns. RN LEGAL has the experience, expertise, and resources to help you with such matters. Contact RN LEGAL on (02) 9191 9293 or [email protected] if you, or someone you know, requires advice or assistance in relation to any aspect of leases.