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StudioS
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Hi Janene, I’ve been through a couple of commercial lease negotiations. The process is that you send through an expression of interest letter first on the property. Then the landlord/managing agent will draft up a Heads of Agreement (HoA) which lists the important commercial terms of the lease including:
* the lease terms (is it 5 years or 3 years?),
* the options at the end of the lease term,
* the landlord incentives (as you mentioned things like the rent free periods, landlord contribution, rent abatement etc),
* base rent (how much rent/sqm you’ll be paying)
* outgoings
* bank guarantees
* make-good obligations

This document is extremely important, even through most of the times it is NOT legally binding. I’d make it say specifically in the Heads of Agreement (HoA) that it is not legally binding. Most of the commercial negotiations happen with this document, by both parties amending the terms in the document until you’re both happy.

After the HoA is finalised, that’s when you pay the deposit on the premises, and the landlord’s solicitor will draft up the formal lease document based on the HoA. This is when you get your solicitor involved to review the lease.

In my experience, the solicitors aren’t very good with the commercial terms of the lease – they don’t have the industry knowledge to know things like the market rent or the market incentive amounts. I got tenant reps to help me through the negotiation of the HoA. Let me know if you would like recommendations – I know a few good ones who’ve worked in the industry a lot of years.

Whatever you do – NEVER accept the first offer from the landlord! Good luck!

Shirley