We work extremely hard to lease your property as soon as possible.
Firstly we invest in specialist staff training, carefully developed internal quality systems, databases and leasing programs.
We spare no effort to recruit and retain high quality experienced operators with a record and passion for high performance.
We provide recommendations on preparing the property for lease as well as proposing marketing elements such as boards and the internet to generate quality enquiries. We keep you informed of our progress throughout.
Upon finding a prospective tenant we make every effort to ensure they have good references and are suitable businesses for the property that will ultimately add value to your investment.
The following is a guide only and it is strongly urged you read all associated documentation, and make your own enquiries.
Leasing a Commercial & Industrial property is different to leasing a residential property. Every client's property requirements are unique.
Activity within the local area that may effect commercial property and rental values include:
We have a disciplined leasing process which is summarised hereunder;
We need to pre-agree and formalise our role that you want us to perform.
The Estate Agents Act requires that any arrangement for the provision of Agency services must be in writing. As members of the Real Estate Institute of Victoria (REIV) we use the standard REIV Authority forms which have been designed to meet the requirements of Estate Agency Law.
This is the contract between the landlord and the tenant. It sets out the obligations of each party. Whenever there is a query of dispute it is always the first document we refer to.
Most of our lease transactions involve the preparation of a HOA. This document summarises the basic terms and conditions which upon agreement is signed off by both parties. The HOA is then provided to the owner's solicitor to prepare the lease documentation.
Gross rentals cover all tenant obligations (outgoings) in a single charge. Rent and all outgoings (excluding consumables) are combined together in a gross rental paid monthly.
Net rentals are paid monthly whilst outgoings are charged when they fall due. For details of types of outgoings see Frequently Asked Questions (FAQ) on this subject.
The Retail Leases Act requires landlords to offer thants the opportunity to pay a security deposit in cash or by bank quarantee. A bank guarantee is usually an irrevocable undertaking by an Australian Bank to pay upon demand. In the event a bank guarantee is called up to the Landlord, the landlord will be legally answerable for their actions.
The rent is based on the comparable rents of other properties within the area that are of similar size, presentation, and positioning. The rent is ultimately determined by the owner on the basis of these facts and on the advice of the agent.
Normally there is a fixed or CPI annual increase during the lease term. However upon your lease renewal (if any) the rent is determined at market level.
Outgoings are the expenses attributable to and necessary to maintain a functional property. Most commercial leases require the tenant to reimburse the owners outgoings. These are paid by the tenant in addition to the agreed rental.
For a 'gross lease', outgoings are included within the rental as a single payment. There are no further outgoings for the tenant to pay as they are settled by the owner of the property other than such things as phone, electricity and water consumption.
Property charges such as:
Under the Retail Leases Act the owner is required to pay land tax on their premises. This is a non-recoverable expense. For properties not covered by the Retail Leases Act, these outgoings are recoverable from the tenant based on a single holding basis.
Owners Corporation is the new term for Body Corporate.
An Owners Corporation is a company appointed to manage the shared areas of a building or a number of adjoining premises. The owners corporation will collect charges for utilities, cleaning etc for the common areas and will charge a portion to each premises as defined by the deed of
incorporation. The Owners Corporation charges will in most cases be chargeable to the tenant as part of the lease obligations.
An owners corporation exists where a property is part of a strata plan. The owners corporation ensures the wishes of the collective owners are implemented, owners corporate outgoings are paid and the owners corporate rules are adhered to.
It should be noted that with most owners corporations the building insurance is arranged by the owners corporation and incorporated into the owners corporation fees.
For further information refer to the Owners Corporation Act 2006 www.legislation.vic.gov.au
This includes the lessor's building, public liability and plate glass insurances.
Additionally, the tenant is required to take out their own contents insurance. For more specific information regarding insurance, contact your insurance provider.
This is the number of years the tenant agrees to lease your property. It is 'term certain' you are allowing the tenant to use the premises.
This will be determined by the owner, however under the Retail Leases Act, the minimum lease term allowed is five years in total. This can come in the form of a 2 x 2 x 1 year lease or a 3 x 2 year lease, as examples.
Short term leases (eg. 12 month lease) are acceptable but a waiver needs to be obtained and accepted by the Small Business Commissioner. For further information look up www.sbc.vic.gov.au
After the initial lease term most leases provide for the tenant to extend their lease by a pre-determined period.
This is a cash amount which is paid by the tenant and held in an interest bearing account as required under the Retail Leases Act to secure against non-performance of the lease obligations by the tenant - this will usually be between one and three months rent inclusive of the GST or more subject to
the level of security provided.
The Retail Leases Act requires landlords to offer tenants the opportunity to pay a cash security deposit or by bank guarantee. A bank guarantee is an irrevocable undertaking by an Australian Bank to pay upon demand.
A bank guarantee can be provided as an alternative to a security deposit.
Director's guarantees are there to provide additional security to the owner. In the event that the lease of a premises is under a company name and these are in place, then the directors who signed the lease are personally liable for the company performance under the lease.
If the lease in under a company name then the directors of that company must sign the lease agreement.
The Retail Leases Act was put into legislation in 2003, It is designed to enhance;
a) the certainty and fairness of retail leasing arrangements
between landlords and tenants; and
b) the mechanisms available to resolve disputes concerning
leases of retail premises
In the Act, retail premises means premises, not including any area intended for use as a residence, that under the terms of the lease relating to the premises are used, or are to be used, wholly or predominantly for;
(a) the sale or hire of goods by retail or the retail
provision of services.
Retail leases legislation applies to a retail premises lease used for the sale or hire of goods by retail or the retail provision of services and where the occupancy cost is less than $1 million per year.
The disclosure statement forms part of the lease and is a statement that is required to be completed by the landlord under the Retail Leases Act 2003.
The landlords’ details
Credit references provide some indication to the owner and the agency that the potential tenant is reliable, timely, honest and trustworthy with regards to the payment of invoices and bills. The references could include, past
landlord(s), regular business suppliers, audited financials, and estate agents who they have leased premises from previously.
Under the Building Regulations 2006, owners are required to provide a premises that complies with the Essential Safety Measures legislation. Premises are required to be inspected annually (some bi-annually) to ensure the premises remains compliant. The owner is required to pay for the cost of these inspections in accordance with Lease obligations.
Should the premises be found to be non-compliant then significant fines could be imposed.
Most leases state the premises upon lease termination must be in the same condition as the lease commencement, excluding fair wear and tear. If we manage your property we ensure the tenant is aware of their obligations and inspect the premises to ensure the lease has been complied with.
Yes they can, but the details of the actual works including what needs to be done, time period, costs etc. needs to be correctly stipulated via a written request to the landlord which can then either be accepted or denied by them.
Goods and Services Tax is added to charges relating to all commercial property. Once registered GST can be claimed back as part of the quarterly BAS Statement, depending on the business ownership and reporting structure. If you need specific information regarding GST on leased premises, speak to your accountant
Nichols Crowder issues Tax Invoices and collects "consideration plus GST" from tenants on the behalf of owners. Monthly statements are provided with the information necessary to complete BAS statements. Monthly statements also serve as a Tax Invoice and set out the management fees and GST levied and collected/deducted from the income collected.
Current tax law has a special interpretation of leases and considers that any amount which becomes payable according to the terms of an agreement (lease) is to be considered "consideration for supply".
If under a lease a tenant is required to reimburse or pay an amount eg: council rates, then as soon as that payment is made by the tenant, that amount paid is deemed to be "consideration for supply".
As soon as payment becomes due by the tenant, under a lease it changes its nature under tax law interpretation. Accordingly technically, reimbursement of rates becomes "consideration of supply" and is legally indistinguishable from rent.
The tax law deems that the payment has been received by the landlord and 1/11th of the amount received is payable by the landlord as GST.
The leasing fee is payable immediately when the lease becomes unconditional. Nichols Crowder will issue a tax invoice and deduct this from initial rentals as they are collected.
The owner needs to have a lease prepared by their solicitor. There are no legal costs for the tenant unless they engage a solicitor to verify that the lease document reflects the agreements made between both parties.
Disclaimer: Particulars herein are for information only and do not constitute any representation by Nichols Crowder. Interested parties should make their own enquiries.