How to negotiate setup period and expenses for commercial lease

Hello

I am an investor but not well versed in commercial leases.

I am looking at setting up a business (retail shop) in outer west Sydney. I have been given a lease - "Schedule 2 Retail Leases Act 1994, Lessor's Disclosure Statement".
It is the ground floor of a building (offices upstairs), not sure if its strata.

I was hoping for some advice and also to check if it is standard on some of these points

- Being a government form I’d assume that it is standard, although it’s the first time I’ve seen that the tenant has no opportunity to extend the lease (is that a government thing?)

- on how best to ask for period to setup my business (rent free)

- And as it is a start up.. ask for lower expenses ? They have asked for 29% plus GST

- Is it right that expenses include management fees, insurance, fire levy, council rates, land tax and water?


I’m quite a novice when it comes to commercial leases. Any advice on what else to look out for?

thanks very much

 

@Scott No Mates will be the man to give you solid advice.

pinkboy

 

@MissP - this is a retail lease covered by the Retail Leases Act 1994

• Lessee doesn’t pay lessor legals for retail leases
• No automatic right to extend (option)
• Lessor must offer a minimum term of 5 years, what you end up negotiating may be longer or shorter
• It is NOT a government issued form, it's a Law Society Lease
• Outgoings of 29% - you will be occupying 29% of the building (about 1/3). This is subject to survey and also in the Disclosure Statement. These will be a monthly charge and reconciled annually. Should be an audited statement.
• Retail leases require that you engage your own solicitor (for the lease)
• Lawyers aren't the best person to negotiate the commercial aspects of the lease (but good for the compliance with the legalities)

Pretty much everything else is up for negotiation:

• Rent
• Rent free
• Capital contributions
• Outgoings (what's included)
• Fitout manual
• Make good provisions
• Redecoration
• Demolition
• Relocation
• Core operating hours
• Usage
• Insurance requirements

A retail tenancy advocate would provide specific advice and negotiate these terms and others.

 

Awesome post. And very true on lawyers, the majority seem to have never done anything more risky than to make an extra contribution to their super - very risk averse and have very little commercial ability

 

thanks @pinkboy and @Scott No Mates for your responses.

@Scott No Mates
"A retail tenancy advocate would provide specific advice and negotiate these terms and others."
Is there one you recommend I can speak to ?

thank you