Thinking
about leasing a shop, office or factory and not sure what the process is?
Here are the
10 steps you need to follow:
1. What building will suit my business?
2. How do I find properties?
3. Arrange an inspection.
4. Making an offer.
5. Acceptance and deposit.
6. Leases and Disclosure statements.
7. Before lease commencement.
8. Key handover.
9. Traps.
10. Grand opening.
If you follow these you will hopefully achieve your goal of securing the
right leasing package for the right property. We want to encourage you whether
you are just starting out in your
business or leasing something larger or a second or third building. The 10
steps are discussed in more detail below.
1.
What building will suit my business?
a. What location, size and budget do you
have in mind?
b. Do you need certain features such as
a wide frontage, a particular zoning, parking and access, exposure, building
height, power or gas supply.
c. You need to have a shortlist to avoid
wasting time looking at the wrong property.
d. Are you after a short 1 – 2 year or a
longer 5 year lease?
2.
How do I find properties?
There are several ways of doing this.
a. Word of mouth. Someone tells you that
a building is soon to become available.
b. A search of internet sites such as:
or agent web sites such
as ours.
c. Agents Signboards
d. Contacting agents directly.
3.
Arrange an inspection and weigh up
the options.
Simply make a mutually convenient time after establishing that the
property suits your criteria and then weigh up the following:
l Are there features that you need on site such as NBN,
air conditioning, grease traps, 3 phase power, gas, parking and access that may
not be evident at the inspection?
l What work is required (if needed) to suit your needs?
You may need to bring through consultants to price this.
l Are there any council or other permit issues?
l When is the property available?
l Will this property suit my customers?
4. Making an offer.
If the property is suitable we will give you an indication of the terms
on offer. If that is attractive, we will provide you with a letter of offer also
known as a Heads of Agreement (H.O.A.) covering the broad terms. If the lease
is a retail lease as defined by the Retail Leases Act 2003 we will also provide
a copy of the proposed lease, usually a 2014 Law Institute of Victoria or 2016
R.E.I.V. format and tenant fact sheet which you can find here: https://www.vsbc.vic.gov.au/wp-content/uploads/2018/10/vsbc-retail-leases-brochure.pdf
This is useful even if you are not a retail tenant. Once you have received an
offer to lease, obviously you need to read it and familiarize yourself with the
terms. Many prospective tenants also take the opportunity to speak to a friend
or relative or even a solicitor familiar with the process to ensure everything
is recorded correctly. If you have any questions or need something clarified,
now is the time to do it. The agent will then answer any questions and amend
the offer if needed.
5.
Acceptance of the offer and payment
of a deposit.
This is done when the offer is made and is normally two months rent and
gst where applicable. Provided there is no last minute adjustment and the offer
put is in line with earlier discussions, the landlord counter signs the offer
and the lease and disclosure statement are prepared and issued.
6.
Leases and disclosure statements.
Leases and disclosures statements normally take from 2 – 14 days to
prepare. The disclosure statement is a list of items some of which are in the
lease such as the lease term and options and rent reviews but specifically list
outgoings payable, fitout requirements, fixtures and fittings, special
conditions and the like. Once you receive this you need to read it again to
check that the items agreed to in the offer to lease are included. Now is not
the time to see an advisor for the first time. If you have had advice
initially, you should return to that person if need be and makes sure
everything is clear in the documentation.
7.
Before lease commencement there are
items to be attended to.
During this time you need to attend to the following:
a.
Sign and return the leases for the landlord to sign and include a signed
and dated disclosure statement.
b. Arrange to connect services such as
gas, power and internet.
c. Book any removalists.
d. Organise any final inspections with
contractors for fit out and signage.
e. Apply for any permits or owners
corporation approval needed.
f.
Pay
the security deposit and or provide the bank guarantee.
8.
Key handover.
This is done on the commencement day of the lease provided items 7. a and
f. above have been completed. Make sure you record the keys, pass cards and any
remotes for doors including car parks, air conditioners or security alarms. You
should also take photographs as a record of handover and send these to the
agent. Whilst it is recommended that you change the locks for your own
security, make sure you ask in case they are restricted keys.
9.
Traps to be aware of.
Sometimes things go wrong. Parties get cold feet, have acted in haste, do
not realize the time and financial commitment involved or have simply not done
their homework. To avoid this you need to get advice when needed and ask
questions, often frequently. The agent is there to assist you in the process
but cannot alas be your advisor. The landlord too, wants you to be successful
but cannot run your business or pay the bills as they fall due.
10. Grand opening.
Make sure you start with some fanfare. Celebrate the opening of the
business with friends and neighbours and on social media. You have worked hard
to get to this point and everyone involved on the journey will wish you well.
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