Szabo & Associates News & Updates

Commercial lease agreements can be complex documents designed to meet the needs of both the landlord and tenant of a property under changing circumstances. No wonder things can go wrong for either party if they are not careful, especially as a commercial lease involves a significant commitment for both parties. Below, we outline some common mistakes that can represent pitfalls for prospective tenants.

Key considerations in commercial (non-retail) leases

Commercial leases can be complex and a minefield for the unwary. As a minimum, there are a number of essential issues to consider before agreeing to a lease, whether as a landlord or tenant. This starts with ensuring the lease documentation is correct so as to avoid, or at least minimise, disputes arising during the lease period. Key terms can initially be documented in a Heads of Agreement and signed by both lessor (landlord) and lessee (tenant).

The recent case of Radney & Radney (2022) FedCFamC2F 53 illustrates the need for separating couples to formalise a property settlement- in this case, before a blended family scenario altered the status quo many years later.

It is not unusual in commercial disputes for one party to argue, because they have a right of set-off that they are not liable to pay all or part of a claim made by the other party. Set-off is a common law right allowing commercial parties which have debts owing to each other to set them off.

A commercial lease is a contract between a landlord and a business for the purpose of renting a property owned by the landlord. Many businesses choose to enter a commercial lease from where they can operate their business rather than buying because there is not the same requirement for capital to invest. As with any contract, a commercial lease comes with a range of responsibilities on the part of both parties.