Law

Should tenants hate those leases to pieces?

November 14, 2021 Paul Brennan
Law
Should tenants hate those leases to pieces?
Show Notes Transcript

Why you should have a lawyer to review your lease before you sign

Brennans solicitors
Lawyers - Property, commercial, disputes, Wills and estates

Landlords are not nice people. Something seems to come over people who own property and rent it out. Once you understand that they get a lot easier to deal with. 

I know some people who may not be landlords but who instinctively have the temperament for it. On the other hand, most landlords struggle to be nasty—but we all usually manage it in the end.

The main tool of the landlord is the lease. When landlords select a form of lease they generally opt for the Terminator variety rather than the Winnie the Pooh model. Leases are a minefield for the unwary. They contain delayed action mines that can go off months or years later—usually when your business is facing its darkest hour. With most new businesses failing within the first two years you can probably understand why landlords are a little paranoid.

Even after trying to find out where to sign, sometimes made easier by helpful red sign here stickers, often commercial leases remain unread by the tenant, all twenty-five plus pages!

Here are just a few things that can go wrong -

1.     No assignment clause. This means you cannot offload the lease if you run into trouble.

2.              You assign the lease to another but you remain liable for their non-payment, or non-payment by anybody they assign it to. Options to renew are better than one long lease period. 

3.    If you secured a bargain rent, or at least one that you could afford, then watch out for a market review after one year which could make the rent go way up.

I know I can’t deter the red-blooded prospective tenant from the ‘Just do it’ approach. It certainly worked for Nike.   

But leases are what lawyers do well. Some lawyers even enjoy reading leases. Sad, but useful if you are a tenant who doesn’t want to lose his or her shirt.

© Paul Brennan 2018. All rights Reserved.

Extract from "The Art of War, Peace & Palaver: The Contentious Guide to Legal Disputes"