commercial lease

Important Safeguards when Signing a Commercial Lease

Aussie Fitouts have been designing, building and project managing shop fitouts for over 20 years. That’s a lot of shopfitting history right there!

During the years we have scaled the heady heights of completing many fabulous fitouts.  And, we have also had to plough our way through the morass of weighty planning legislation, council bylaws, building inspections and commercial lease agreements that are part of our industry. The good news is… practice makes perfect.

Part of what our clients love about working with us is that we know our stuff; we are industry experts; we have learned the ropes through years of hands-on project management.

We are able to use our experience to help our clients avoid any pitfalls in their fitout project – from choosing a location to final completion.

Aussie Fitouts have identified some key areas to safeguard you when entering into a commercial lease arrangement –

Don’t rush in!

The biggest and most expensive mistake we see is business-owners signing a lease prematurely. Agents and potential landlords can be very persuasive at lease-signing time and can definitely over-promise on the possibilities and under-deliver on the realities of the property. A little caution can save you a lot in both time and money.

Quick Tip: Always go away and think about what’s on offer and seek professional advice.

Complete site due DILIGENCE

It is imperative to complete due diligence before you sign on the dotted line.

Take a step back, become objective, and don’t hesitate to involve professionals. Aussie Fitouts are often involved in a project pre-lease, to help ensure the premises will deliver everything our client needs from it. We are able to offer a thorough assessment and a design plan for the building – BEFORE you sign up. This ensures you will get the results you need. We can’t stress how important it is to be thorough at this stage.

Some questions to ask….

Q: Is the premises fit for the purpose you are intending?

Aussie Fitouts have seen the devastation caused when eager businesses sign a lease only to find out it is not suitable for their intended business. They are left paying the lease and cannot proceed with their plans. Avoid this tragic pitfall and complete a site due diligence.

Q: Does it have development approvals?

Don’t take a vendors word for it on these important matters. Ask to see approvals and talk to the council or relevant regulatory authority.

Q: Do the premises have disability access?

Q: Does the property have enough power for the needs of your proposed business?

Q: Are there trade waste disposal services at the premises to accommodate your addition?

These little details are very important. They can be easily overlooked with so many other things to consider when choosing a property. That’s where a professional team can really help. We know the right questions to ask.

Quick tip: Ask lots of questions and make sure you get the facts in writing.

The team at Aussie are always happy to assist you with this process. We include site due diligence as part of our project management services and can use our experience to help you navigate due diligence procedures without stress.

Discuss landlord contributions and rent-free periods

When considering entering into a commercial lease talk about lease incentives with your landlord during the negotiation stage.

Leasing incentives can include:

  • A rent free period – landlords may offer a rent free period of up to 12 months to entice a tenant to enter into a lease
  • A cash payment as a contribution to the fitout – the tenant will undertake the fitout and retain ownership but the landlord will make a contribution towards the fitout as an incentive for a tenant to enter into a lease agreement. Aussie Fitouts can help you cost and negotiate this.
  • Landlord works – Aussie Fitouts can help you negotiate a list of works that the landlord can carry out or engage Aussie Fitouts to complete on his behalf, so these costs are not part of your fitout.

Negotiate, negotiate, negotiate

Remember the art of negotiation is paramount in entering into a commercial lease agreement. Nothing is set in stone – landlords often negotiate terms if pressed.

Quick tip: Ask for what you need and don’t be afraid to push the envelope to negotiate conditions and rentals that are favourable to you.

Don’t be hurried into signing a lease – however amazing the premises or the deal may seem. Play your cards carefully and err on the side of caution.

Negotiating a lease agreement can be much like playing a game of chess – you need to think carefully and take your time to execute your next move for a winning deal.

“Please feel free to call us for assistance in this very crucial stage of your new business.”    The Aussie Fitout Team

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