Commercial Lease Agreements

A lease agreement is the formal document containing all the agreed terms and conditions of the contract which provides recognised property rights to an individual. It becomes binding once it is signed by both parties.

Once the lease starts, a copy is normally lodged with the Land Titles Office to be registered on the property’s Title. The length of the lease agreement will determine whether registration is required. In a straightforward leasing transaction, the lease agreement will usually be the final document signed.

Entering into a Commercial Lease Agreement

Below are some key issues to consider prior to entering into a commercial agreement.

1. Permitted Use of the Premises

Before entering into a commercial lease, you should check with the local council that you can operate your business from the leased premises. If your business is not currently zoned for the premises, you may be able to lodge a development approval with the council to have your proposed use of the premises approved.

2. Costs

Your commercial lease should specify what costs you will need to pay. Commercial leases do not have the same protections as retail leases. This means the landlord may try to recover all sorts of costs and outgoings from you. You should always request a breakdown of likely outgoings if they are payable in addition to rent.

3. Personal Guarantee
You can refuse to provide a personal guarantee. However, the landlord may require one before you sign the lease. We strongly recommend that you seek for professional advice before providing this type of guarantee.

Before signing any agreement, it is important that you:

• read every word, including the fine print
• ensure that it reflects the terms and conditions that were negotiated
• seek legal advice
• allow plenty of time to consider and understand the contract
• do not be pressured into signing anything if you are unsure
• make sure that you and the other party initial any changes to the contract
• obtain a copy of the signed contract for your records.

If you would like to know more about your rights and options, Straits Lawyers are here to help. We are now offering online services in both English and Chinese.

Please note that this article does not constitute legal advice and Straits Lawyers will not be legally responsible for any actions you take based on this article.