Many legal minds making NZ LAW work

We are an association of independent legal practices, proactively sharing ideas and expertise for the benefit of our clients.

Leasing commercial premises

Published: 5th November 2019

Author: Andrew Bright, RMY Legal

Published in: Property eSpeaking

Before you sign the lease
Commercial leases come in varying shapes and sizes. Whether you operate a transport business and need a place to park your trucks, manufacture and sell goods from a warehouse or conduct your trade from a boutique store in the heart of the CBD, your lease agreement will be at the heart of your business.

Before you sign a lease, there are a number of core issues to consider. It is important to do your homework and talk with us before you commit to anything.

The rent
The first thing you are likely to consider is how much rent you will be paying. It’s good to remember that an agreed rent as stated in the lease can change (usually up!) through a rent review process. If you have a sub-lease your rent may be linked to the head lease. If this happens, and your landlord’s rent is increased, then your rent is also likely to increase.

The parties to the lease
If you run your business as a sole trader, then it is likely that you will be the tenant in a personal capacity.

If your business operates through a company, your company is likely to be the tenant. In addition to your company being the lessee, the landlord may also require personal guarantees from those involved in the company. You may need some guidance on the impact of being a guarantor under a commercial lease. Generally speaking, it holds you personally responsible for any of your company’s defaults under the lease.

The landlord should be the legal owner of the property. If the property is not owned by the landlord, you should find out who does own the property. Otherwise you could be unwittingly entering into a sub-lease agreement, which comes with slightly different rules. Your sub-lease will likely be subject to the head lease which may impose additional responsibilities on you in favour of the head landlord.

Check the premises description
You must ensure that the lease correctly identifies the premises you are leasing. If you lease the entire property, then the lease should refer to the property’s title reference. If you are only leasing part of the property, then it is useful for the landlord to attach a floor plan that outlines the premises for which you have exclusive use and any areas that you can use in common with other tenants. It’s also wise to check if there are car parks attached to your lease and for you to identify if you have exclusive use of these or if they are available on a first-come-first-served basis.

Use of the premises
You should check the permitted use (also called’ business use’) in the lease and ensure this correctly identifies what you want to use the premises for. If the use says retail shop but you want to open a takeaway shop, you will need to have the use changed.

Most leases contain a provision that allows you to ask your landlord for a change to the permitted use. A landlord needs to consider your request and cannot unreasonably withhold consent. We can assist you with this process if required.

Factor in the outgoings
Outgoings (sometimes known as ‘opex’) are the additional day-to-day expenses you must factor into your costings, over and above the rental. These outgoings include charges for rates, utilities, insurance and maintenance. It is important to carefully read the list of outgoings in your lease. If there are outgoings that don’t apply to your leasing situation, cross them off the list. In some situations, your landlord may add items such as paying for the external maintenance of the premises.

If you only lease a portion of the property, then you will pay a percentage of the outgoings. If charges are not separately metered, you should think about adding a clause to determine how these are calculated.

Who pays the costs for leases?
In most cases the parties pay their own legal fees for the signing of a lease and documenting any changes such as rent reviews or renewals. If you don’t meet your obligations under the lease, your landlord can recover any expenses incurred in enforcing their rights from you.

Signing a commercial lease is a significant commitment and there is a great deal to consider before you sign on the dotted line. Make sure you’ve addressed every issue before you sign; it is much harder to renegotiate a lease once the terms have been agreed and the lease signed. If you’d like some guidance on your commercial lease, we can help tailor your lease to suit your business goals.

Related Articles

  • Auckland
  • Bay of Plenty
  • Canterbury
  • Coromandel
  • Gisborne
  • Hawke's Bay
  • Kapiti Coast
  • Manawatu - Wanganui
  • Marlborough
  • Nelson
  • Northland
  • Otago
  • Southland
  • Taranaki
  • Waikato
  • Wairarapa
  • Wellington
  • West Coast

Simpson Western

Simpson Western is a leading law firm in Auckland North, with offices in Takapuna and Silverdale.

The firm has ten partners, supported by a team of specialist lawyers, legal executives and a general manager, together with a team of excellent support staff.

Region: Auckland

Phone: 09 486 3058

Jackson Reeves Lawyers

Jackson Reeves is a long established law firm that has been providing quality legal services in Tauranga and the Bay of Plenty region for over 60 years. We have proven expertise in business and personal law and deliver high calibre legal advice and solutions that work for you.

Choosing a law firm is not always an easy decision but you can take comfort in the knowledge that Jackson Reeves take a client focussed approach, providing specialist and practical legal services. Old fashioned virtues, like integrity, transparency and trust are of importance to us and we value quality, relationships and diversity.

Region: Bay of Plenty

Phone: 07 578 2129

Malley & Co

Our experienced, solutions-focused team will work hard to get you the best possible outcome, whatever your legal needs.

Region: Canterbury

Phone: 03 379 0712

Purnell Lawyers

There is nothing as inevitable as change. Since opening for business early last century, we at Purnell Lawyers have seen many changes both in name and in the people who have made up the members of our team. We have been privileged to have served the public throughout all of these times. 

We are confident that we will continue to bring top quality legal services to our clients well into the future.

Region: Coromandel

Phone: 07 868 8680

Woodward Chrisp

At Woodward Chrisp we strive to meet the needs of our clients by providing a wide range of high quality legal services within a supportive and collaborative environment.

Woodward Chrisp is the amalgamation of two long established Gisborne legal firms: Woodward Iles & Co and Chrisp and Chrisp. Today’s partners are Ross Revington, Adam Simperingham, Jeff Allen and Ellie FitzGerald.

Region: Gisborne

Phone: 06 869 0900

Gifford Devine

For all life’s matters, the team at Gifford Devine have your back. Since 1896, our lawyers have been providing straight-talking, practical advice and advocacy to people, families and businesses in Hawke’s Bay.

As your legal champions, we’ll serve you as a trusted adviser, listen to your needs, offer plain English advice, and find a solution to get you the best possible outcome.

We have the expertise to identify potential legal issues, to help you make important decisions, and to realise your goals. We’re your legal champions for all reasons and at all stages of life.

Region: Hawke's Bay

Phone: 06 873 0420

BMC Lawyers

BMC lawyers has built a reputation for providing quality service and delivering real results. Our strength is our broad-ranging legal experience that gives us the ability to match clients with the right mix of legal skills for their particular needs.

Our legal professionals are passionate about what they do and work alongside a talented team of support and administration staff to make a real positive difference to our clients.”

Region: Kapiti Coast

Phone: 04 296 1105

Horsley Christie

Horsley Christie is a successful law firm based in Whanganui which offers a diverse range of legal services to the Whanganui Region and beyond and has done for over 100 years.

When you deal with Horsley Christie you do so in the knowledge that the firm is one of many law practices nationwide who are members of NZ LAW.

Region: Manawatu - Wanganui

Phone: 06 349 0090

Wain & Naysmith

Based in Blenheim, Wain & Naysmith Lawyers is a full service law firm, and a powerhouse for property, family and business law.

We pride ourselves in providing clear and cost effective legal solutions and practical advice for you, your family and your business.

Region: Marlborough

Phone: 03 520 6103

Knapps Lawyers

As a firm, we promise to look after you and treat you in a manner that we would expect to be treated by a professional services provider; we promise to use every available legal remedy available to us to resolve your issue and to do what you ask us to do in a timely manner.

We will hold in strict confidence all information that we acquire through our work for you and which concerns your business or personal information.  The only exceptions are where you authorise us to disclose such information or where we must do so by law.

Region: Nelson

Phone: 03 544 7888

Law North Limited

We pride ourselves on being a "general store" for most legal issues but also have several in-house experts in specialised areas including trusts, relationship property, business and property law.  No matter what your issue is - whether you are looking for trusted legal advisers to steer you through life, or you have a one-off problem to sort out - we would be pleased to help.

Law North Ltd provides a broad range of legal services across the Far North district from our base in Kerikeri.   We have operated in the area for over 100 years and have a long-standing history of providing legal services to a diverse client base, including businesses and private clients.   Our directors and their families have been part of the Bay of Islands community for several generations and remain committed to the area and its people.  We often call upon strong local knowledge to resolve issues for clients whilst remaining vigilant about client confidentiality.

Region: Northland

Phone: 09 407 7099

Aspiring Law

As one of the leading general practice law firms in Wanaka, the wider Upper Clutha and Central Otago Lakes district, our job is to explain both of our respective roles in managing your legal matters.

We’re a friendly group of people and our philosophy is based on three simple principles to make sure you avoid messy, lengthy, and costly legal issues:

  • Don’t leave anything to chance - certainty provides peace of mind
  • Seek expert advice - it really is the best and most cost-effective thing you can do
  • Ask for that advice early - it will be cheaper for you in the long term

Region: Otago

Phone: 03 443 0900

Sheddan Pritchard Law Ltd

Incorporating traditional values and a fresh perspective, Sheddan Pritchard Law is here to assist you with all your legal needs. 

Our friendly and team-driven approach underpins our firm’s values, recognising the importance of putting people first and allows us to connect and nurture professional relationships with new and existing clients within our local community of Gore, as well as throughout New Zealand and extending overseas.

Region: Southland

Phone: 03 209 0030

Welsh McCarthy

Welsh McCarthy practises in Hawera, South Taranaki. Predominant industries in the South Taranaki district are dairy farming, oil and gas. The South Taranaki area also has the largest one-site multi product milk processing facility in the world

We deal with company and commercial transactions, commercial and family law, farm and residential sales and purchases, estate planning and family and charitable trusts. A large part of the firm also deals in the area of family law.

Region: Taranaki

Phone: 06 278 5039

Allen Needham & Co Ltd

Sir Stephen Allen, founder of the firm, was admitted to the bar on the 7th of December 1906 and subsequently set up practice in the building illustrated below on the present site of our offices at 52 Canada Street, Morrinsville on the 1st of January 1907.

Mr Arthur Needham was admitted to the bar on the 1st of March 1923 and Mr R. B. Morton on the 24th of November 1924. They joined Sir Stephen in partnership under the name of Allen, Needham & Morton.

The firm was subsequently called Allen, Needham, Sanford & Lang when the partners of the firm were John Needham (son of Arthur Needham, and father of Rod Needham, a present partner), Howard Sanford, Fred Lang and Graeme Ashmore.

Graeme Ashmore left the firm in 1972 and Howard Sanford retired as a partner in 1974 when Greg McDonnell became a partner with John Needham and Fred Lang.

The firm changed its name to Allen, Needham & Co. in 1986 when new partners Rod Needham and Bob Craven joined the firm. In December 2010 the firm became an incorporated company.

Region: Waikato

Phone: 07 889 5062

Gawith Burridge

Gawith Burridge traces its history back to 1875 when Charles Gawith first set up his practice. Since then the firm has undergone many changes, including a merger between Gawith & Co and Burridge & Co in 1998 to form our current practice.

Our firm draws on the breadth of expertise available from some of the region’s most senior legal practitioners, as well as the skills of those who have moved here from larger corporate environments.

As a result, we provide clients with a comprehensive range of legal services right here in the Wairarapa. We can provide you with legal assistance whether you are an individual or a company, with everything from setting up a Will to selling your farming business. 

Region: Wairarapa

Phone: 06 370 0000

Greg Kelly Law Ltd

Greg Kelly Law Limited is a boutique Wellington law firm specialising in trust and elder law. Our practice areas are wills, estates and trusts.

We act for private and institutional clients establishing and administering trusts, wills and estates. We also provide quality advice to legal and accounting firms in New Zealand and overseas. In particular, we can assist with legal opinions, obtaining and resealing probate, and estate and trust litigation.

Region: Wellington

Phone: 04 499 5193

Hannan & Seddon

The Law Firm of Hannan & Seddon dates back to September 1867.

The firm's offices were in Werita Street from 1867 until 1982 when the firm moved to Tarapuhi Street and then to its current spacious premises at 61 Guinness Street in 1998.

The name Hannan comes from Mr Michael Hannan whose son John Hannan (Jack) joined the firm in 1908. Jack Hannan remained in partnership until he passed away in 1974 at the age of 90!

The name Seddon comes from Mr T E Y Seddon (son of Premier Richard John Seddon from Kumara) who joined the firm in the 1920's. The other prominent Solicitor at Hannan & Seddon was Cyril McGinley who joined the firm in the late 1920’s and retired as a Consultant in 1997 aged 87.

Currently we have two Partners within our firm. Tony Sullivan who has been with us for 29 years and Colin Smith, 26 years. The firm also has two long serving Legal Executives Elaine Knowles and Beverley Walsh.  

Region: West Coast

Phone: 03 768 4169

All the information published on this website, or in any article herein is true and accurate to the best of the authors' knowledge. Information on this site should not be a substitute for legal advice. No liability is assumed by NZ LAW Limited, or individual NZ LAW member firms for losses suffered by any person or organisation relying directly or indirectly on information published on this site. Views expressed in any article are the views of the authors individually and do not necessarily reflect the view of NZ LAW or their member firms. Information appearing on this site may only be reproduced with prior approval from NZ LAW Limited Head Office, and credit being given to the source. © NZ LAW Limited