Whether your business is making its first move to take its own
commercial space for an office, shop, warehouse or other commercial
use or whether it is relocating to new premises there are a number
of important areas you need to consider.
Gas, electricity, telephones, internet and other services
Cleaning and rubbish removal
Costs of moving
Positioning – In many instances the
position of the premises is fundamental to the success of the
business, particularly in retail leases. It can be worthwhile to
budget for a higher rent for a better location;
Size – You need to consider the expected
growth of your business when considering the best size of
commercial property for you to lease. There are many commercial
properties for lease and they become available fairly frequently so
it is best not to take premises for a three or five year term that
may be too small for your business in two years, as you cannot
necessarily exit a lease early just because you have outgrown the
Lease term – The costs of moving offices
can be large and unless you are looking for a short term enterprise
it is often best to try and lease commercial premises that will
suit your business for a longer term, even if you do not wish to
commit to a longer term. You will need to weigh up the additional
incentives the landlord will give you in terms of rent free periods
or contributions to your fitout of the premises for a longer term
lease as against the ease of exiting the lease for a short term
Buy verses lease – Another factor to
consider is whether you wish to buy your commercial premises or
rent them. We suggest that if the location is fundamental to your
business and you will not need to grow the space then buying
commercial premises that become available in the right location may
be a good option for you, whether you buy the premises outside or
inside of your superannuation. If that is not an issue at this
stage then you could consider trying to have a first right to buy
the property put in to the lease if the landlord wants to sell down
Many people do not go to a lawyer in relation to their lease
until the commercial terms have been negotiated and signed. That is
certainly an option and Focus Legal will review the legal
documentation you are provided with to make sure that the terms you
believe have been agreed actually end up in the lease and your
rights are properly protected. We will also try and minimise costs
and risks to you through the term of the lease.
Sometimes a better way to proceed is to contact us when you are
looking for premises so we can have a preliminary discussion and
provide you with some pointers. We can then review the commercial
terms and advise you of other things you could consider, which
avoids the loss of bargaining position that can occur when you have
already signed commercial terms.
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.
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Warranties can be risk-shifting mechanisms when the party giving the warranty is not the party at fault for the defect.
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