Commercial lease checklist for Mount Isa landlords and tenants
If you’re planning on being a Mount Isa commercial property landlord or tenant, then it’s important to have a lease agreement that suits your needs. This checklist outlines what should be included and made clear in your lease agreement to avoid any potential disputes.
Lease establishment
The commercial lease agreement should outline:
- Who pays for the legal costs to establish the lease.
- When the lease starts.
- The time period of the lease.
- Whether the property can be modified during a fit-out, and if so, whether it must be restored to its pre-lease state at the expiry of the lease.
Rent
The commercial lease agreement should clearly explain:
- How much the regular rent repayment is, when it must be paid (i.e., in arrears or in advance) and how often it must be paid (for example, weekly, fortnightly or monthly).
- The ramifications if rent payments are made late or not at all (for example, interest penalties and the potential for eviction).
- Whether or not a security deposit is required, and if so, how much, as well as the associated terms and conditions for either withholding or refunding the deposit.
- How rent increases are determined (for example, CPI-linked or via a market review).
- Whether both parties (i.e. the landlord and tenant) can hire a specialist commercial property valuer if there is a dispute over market rent.
Expenses and Maintenance
It is vital to clarify who is responsible for paying each property expense in the commercial lease agreement. For example:
- Rates, taxes, electricity, rubbish removal, yard maintenance, air conditioning equipment, cleaning, insurance, repairs and maintenance.
If these expenses are not included in the tenant’s regular lease amount, then that needs to be made clear in the lease agreement.
It’s also important for the lease agreement to clarify who will be responsible for ensuring the ongoing maintenance and appropriate insurance of the property.
Restrictions
A commercial lease should highlight if there are any tenant restrictions. For example, any restrictions on:
- The type of business that can be operated on the commercial premises. This will be influenced by the relevant Mount Isa’s commercial property zoning regulations.
- Trading hours.
- Whether or not the tenant can sublet the premises, and if so, the associated terms and conditions.
- Whether or not the tenant can end the lease before its term expires, and if so, relevant terms and conditions such as notice periods or financial penalties.
- Whether or not the tenant can transfer or assign the lease subject to the landlord’s approval (for example, if they sell the business during the term of the lease), and if so, the associated terms and conditions.
Options
It can be worthwhile in some circumstances to include options in the commercial lease agreement. For example:
- Options for the tenant to renew or extend the lease, including the associated terms and conditions.
- Options for the tenant to buy the lease, including the relevant terms and conditions.
The bottom line
Make sure your Mt Isa commercial property lease agreement clearly outlines all landlord and tenant rights and responsibilities. Seek legal advice to prepare or understand all the terms and conditions before signing and commencing the lease agreement to prevent or minimise the potential for any confusion or disputes during the lease term.
About us
Jays Real Estate has been Mount Isa’s premier commercial and residential real estate agency since 1981.
If you’re thinking about buying, selling, renting or leasing any Mt Isa property, or you need your property professionally managed, then contact our team today for an obligation-free chat!
We’d be happy to provide you with advice and to answer any property questions you have.