Before Signing a Lease

  • Inspect the condition of the building both externally and internally. If you find something that could be improved, such as floor coverings or three-phase power, you could ask us for items to be attended to as part of the negotiations for the lease.
  • Security is important, so ask us about the security system and all the factors that will make the premises well protected.
  • Established what fittings come with the premises and determine whether the owner or yourself will pay for any extra fit outs.
  • Premises may come with parking spaces and these could be established as part of the lease or could be held under a separate license.
  • Ask us if you need a permit or license to operate your business in the premises. For instance, if you want to operate a food business, you may need approval from your local Council.
  • Sometimes the tenant pays all of the costs of preparation of the lease as the tenant may have to pay both their own and the landlord's legal costs though frequently each party bears its own legal costs.
  • If you are buying an existing business, make sure the current lease can be transferred to you or that the landlord will agree to entering into a new lease with you.
  • We advise you to get professional advice. As well as legal advice, get advice from an accountant on financial matters related to your business, including help with GST.

Get legal advice. All advice given here needs to be checked by your lawyer!

A lease is a legally enforceable contract. It is important for you to be well informed about the legal aspects of your  tenancy.  There are standard Leases, namely the Auckland District Law Society Lease and what is known as the BOMA lease published by the Property Council a body representing major Landlords in NZ. However, not all leases are these forms. You will need to check with your lawyer to determine the suitability or amendments he or she may want you to include. The final lease should include all the details you have negotiated. Every clause is important and needs to be carefully checked. Before you decide on premises, ask for a copy of the proposed lease and read it thoroughly. This saves a lot of time later on.

Checking the lease

Some of the important points to consider when checking the lease.

  • Details about the property you are leasing, including description of premises, rights of access, parking, areas shared with others.
  • The rent to be paid and how it will be reviewed during the period of the lease.
  • The term of the lease.
  • When the lease begins.
  • Are personal guarantees required from the directors? This means that those named as guarantors under the lease are personally responsible for any rent payment and outgoings or other payments under the lease.
  • When and how the lease can be renewed, for example, is it 30 or 60 days before the lease expires?
  • The right of the tenant to complete fit out
  • The ability of the tenant to assign or sublet the premises and how that can be done.
  • Any restrictions on the tenant required by the lessor. An example would be storing flammable liquids.
  • Financial requirements of the tenant. Many landlords want to be sure the tenant will pay the rent and will require financial information prepared by an accountant.

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