This range of New Zealand commercial lease agreements allow for the letting of a number of properties from a restaurant to a unit in an industrial park.
A lease for commercial premises with no Guarantor. The lease contains provisions for payment of rental, outgoings and a process for rental review to market value. Suitable for use throughout New Zealand.
A lease for commercial premises with a Guarantor. The lease contains provisions for payment of rental, outgoings and a process for rental review to market value. Suitable for use throughout New Zealand.
If you are intending to buy a commercial property, you should contact a real estate agent specialising in commercial property.
If you find a suitable property you should have a valuation prepared for it. You should also obtain a Land Information Memorandum (LIM) on the property from your local council. These documents will provide you with much information important in assessing the property's value and potential uses.
The LIM will include, among other things, any special characteristics, the permitted uses of the land, and any relevant consents or notices issued by the council. See How to obtain a Land Information Memorandum (LIM).
You will need to decide what type of entity you should use to buy the property. The options include:
Your lawyer and accountant will help you in deciding on the best ownership vehicle for your situation.
The basis of any successful purchase of a commercial property is the return from the property. The value of the lease is therefore paramount. You should check the term of the existing lease and the financial strength of the tenant. Where the tenant is a company, you should check whether any personal guarantee has been given by a representative of the company. For information on commercial leases generally, see How to enter into a commercial lease.
Before you make any offer on the property you should discuss it with your lawyer.
If this is not practicable, you should make the offer conditional on your lawyer giving his or her approval that the title to the property is in order, and also his or her approval of zoning matters and of any matters disclosed by the Land Information Memorandum obtained from the council.
Your offer should also be subject to your approval of the terms and conditions of all leases and, where appropriate, to your borrowing being approved on terms satisfactory to you.
Once you have decided to buy an investment property you should decide what type of "vehicle" you would like to use in order to create an investment that works most to your advantage. You should obtain professional advice from a lawyer and an accountant as to the preferred entity in whose name the property is to be bought, and as to issues such as GST.
Using what is called the "family vehicle" involves ensuring that any income earned from the investment property will accrue in the name of a family member in a lower tax bracket.
On the other hand, you may buy a property knowing that for a few years it may run at a loss, but expecting that it will ultimately produce a profit. In the short term it will be advantageous to put the property in the name of a family member with a higher income, and therefore the resulting loss can be offset against the higher income in a few years' time.
Another traditional "vehicle" that can be used is a company (see How to form a company). A company provides you with considerable flexibility, enabling you to make changes in the ownership of the property by transferring shares without incurring stamp duty and legal expenses. These changes of ownership can be simple accounting arrangements that allow you to remain in the driving seat.
Another option for families is to buy the investment property through a family trust (see How to create a trust). Trusts allow you flexibility in distributing capital and income to the parties to whom you wish to apply it. You can also combine a trust with a company and thereby obtain the benefits of both.
The main difference between a commercial lease (or "tenancy") and a residential lease is that the RESIDENTIAL TENANCIES ACT 1986 does not apply to commercial leases. Commercial leases are instead governed by the PROPERTY LAW ACT 1952. (For information on residential tenancies, see How to enter into a residential tenancy.)
With a lease the landlord is referred to as the "lessor" and the tenant is referred to as the "lessee".
In order to be valid, a commercial lease must include the following elements:
A lease will ordinarily be in writing, although this is not necessary for the lease to be valid. A written lease ensures that the parties know exactly what their rights and obligations are.
The parties are at liberty to negotiate specific terms in the lease agreement that suit their particular requirements. Because of the nature of commercial property and its uses, the parties may wish to provide in the agreement for issues such as ownership of fixtures and fittings and the intended uses of the property.
An important distinction is between periodic and fixed-term leases. With a periodic lease there is no requirement for the beginning and end of the lease to be certain; instead, the lease ends on notice being given by either party. A fixed-term lease, on the other hand, requires a certain duration for the lease â€“ that is, a certain starting and ending time.
If the lease agreement does not specify otherwise, a lease will be a monthly periodic lease, which means that either party can terminate it by one month's notice in writing.
Frequently one, if not both, of the parties to the lease will be a company. A landlord (lessor) may require a personal guarantee from a representative of the company, usually a director or major shareholder. The effect of this is that the guarantor will be personally liable for any amount owed by the company in the future.
The rights and obligations of the landlord and tenant are provided for in the PROPERTY LAW ACT 1952, and are implied by the law into all commercial leases. These include the following:
The parties have the option of protecting their interests by registering the lease on the Certificate of Title for the property.
A lease for commercial Unit Title premises with Guarantor. The lease contains provisions for payment of rental, outgoings and a process for rental review to market value.
A lease for commercial Unit Title premises with no Guarantor. The lease contains provisions for payment of rental, outgoings and a process for rental review to market value.
A Guarantee of a Lease given as a requirement of landlord consent on the sale/assignment of a lease form one tenant to another. Suitable for use throughout New Zealand.
This lease is for letting part of a multi-tenanted building for offices or business purposes. The building could be a modern office block or offices above retail space. Suitable for use throughout New Zealand.
A comprehensive, business lease for a unit on an industrial estate or a business park. The use could be for any purpose, such as a workshop, factory, depot or warehouse. Suitable for use throughout New Zealand.
A lease of land for any business use, for example, plant or equipment storage or a scrap yard. The lease provides for use of any buildings and/or items of plant on the property. Suitable for use throughout New Zealand.
This is a comprehensive lease for letting a pub or licensed restaurant with a flat or maisonette above for the tenant to live. The premises may be detached or connected. Suitable for use throughout New Zealand.
This lease is drawn for use by a landlord letting a self contained office building on his business park. Suitable for use throughout New Zealand.
This is an easy to use lease for letting the whole of an office building to a single tenant for business purposes. Suitable for use throughout New Zealand.
This is a comprehensive but uncomplicated business premises lease for letting self contained office or storage space above a shop or other workspace. Suitable for use throughout New Zealand.
This letting agreement is for any property with a commercial kitchen. That is, a restaurant, cafe, delicatessen or fast food outlet. The lease allows for the property to have space used for other business purposes too, such as offices above. Suitable for use throughout New Zealand.
This lease is for letting a single shop or retail unit in a multi-tenant parade owned by the same landlord. Suitable for use throughout New Zealand.
This is a lease for a self contained lock-up shop. It could be in a parade or detached. It does not require provision for service charge recovery. Suitable for use throughout New Zealand.
This is a comprehensive and easy to use lease for letting a workshop, barn or other self contained building of any size, for industrial, storage or mixed use. Suitable for use throughout New Zealand.
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