Commercial & Shopping Centre Leasing
For small businesses, understanding the lease of the premises is one of the most important things for the business. A retail lease is a contract that grants the right to operate a business from rented retail premises. As such it is a legally binding contract between the landlord and the tenant. It sets out the terms, conditions and rights as well as the obligations of both parties in relation to the occupancy of retail premises. Leasing law is complex and retail leases are dynamic documents governing rights and obligations over the life of the lease. Once signed, the tenant is obligated for the full term.
Common disputes in commercial lease relationships include scope of exclusivity clauses, lock-outs of lessees by lessors for alleged non-payment of rent, rights of shopping centre managers to see lessee turnover figures and alleged oral variations to the strict terms of the lease.
Tenants in shopping centres encounter unique issues that are not normally faced by retail tenants in other types of retail locations, such as in street front shopping, where each shop is independently owned.
The drafting and negotiation of leases must be considered a serious risk management issue. Time spent in the early stages can prevent possible issues once the lease has commenced and can improve landlord/tenant relationships, as everyone will be more knowledgable on where they stand.