Imagine for a moment that these foundations have been laid
– you have signed the letter of offer or the heads of
agreement ("the HOA") and you or your
solicitor is now required to prepare a lease or review a lease
submitted by the other party. You would probably ask yourself,
where do I begin? What should be in the lease?
It is not possible in the limited space I have here to list
every item that should go in a lease. I will however draw to your
attention some of the key issues that need to be considered when
drafting and reviewing a lease.
Where to start
The starting point in the process is reviewing the HOA and
ensuring the lease documents reflect the terms and conditions set
out in the HOA , including term, monies payable, guarantees and
bond required, method of rent review, and any special conditions
dealing with issues such as car parking, fit out and
Once it is clear on what the terms and conditions are, you need
to consider whether there are any issues that the HOA has not
addressed but which may have arisen during negotiations. Armed with
all this information then you are now ready to prepare or review
the lease documentation.
Issues that can arise
Over the years I have found that irrespective of how well the
foundations have been established in a leasing transaction, the
following issues often emerge during the drafting and review
If the tenant is responsible for reimbursing the landlord for
outgoings, what will go into the definition? Are all outgoings to
be included or are certain items to be excluded, such as repairs of
a capital nature?
Is there to be a claw back of fit out contribution in the event
of assignment or early termination?
Is the bank guarantee to have an expiry date and if so, for how
Are the dates for exercise of any option to renew
How is rent to be determined during any holding over
Where are notices to be served – for example if the
tenant is operating a number of sites and has a head office, is it
more practical for notices to be served at the head office?
In the event of assignment, when is the tenant released from
obligations under the lease? Is it practical for the lease to
provide that change in ownership or control is to be treated as an
Do any insurance provisions allow for the tenant to satisfy its
obligations through a global policy, where they operate from a
number of sites or outlets?
To what extent is the tenant responsible for make good upon
Is there provision to allow the landlord to refurbish or
demolish and if so, how does the lease address the impact of this
on the tenant? Eg. Is there a right to terminate and are there
Are additional documents required given the nature of the
transaction such as a fit out deed, which will document the
parties' obligations for works, payment of any incentive and
set out the basis upon which handover and commencement date will be
Who will be responsible for ensuring that the premises comply
with relevant regulations and insurance requirements including the
maintenance and installation of apparatus such as fire
extinguishers and sprinkler systems?
The Property Team at Coleman Greig are experienced in both
drafting leases and reviewing them. We will consider these and
other issues which may arise during the drafting process and ensure
your rights are protected. For more information contact Andrew
Grima at firstname.lastname@example.org.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Council announced planning policies to encourage more inner suburban retirement village and aged care development.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).