In most cases a business owner will require premises to operate their business from. Unless they are able to purchase the property they will need to find suitable premises and then enter into a lease agreement with the owner of that property.

Lease agreements can be a source of dispute so it is important that both the tenant and the owner (Landlord) understand and are in agreement with the terms and conditions of such an agreement.

The business should take the following into account before entering into a lease:

1.    The suitability of the premises for the operation of the business. This will include the size, storage facilities, the surrounding businesses, access for customers, parking etc.
2.    The period of the lease, termination clauses as well as options to renew.
3.    Any trading restrictions which may impact on your product.
4.    Security- the arrangements and responsibility
5.    Do any alterations need to be made to the premises to make them suited to your business and will the Landlord pay for such alterations?
6.    Restrictions on a competitor being in the same complex
7.    There are situations where the Landlord will charge a basic rental and then link a further amount to the monthly turnover of the business. Try and avoid this type of rental arrangement.

Basics of a Lease Agreement

A lease should at a minimum contain the following:

1.    Full details of the Tenant. If an individual this would be full names and ID number. If the tenant is a company- Full name of company and registration number. This would also require a resolution giving the person signing on behalf of the company authority to do so.
2.    Full names of Landlord. If an individual ID number and full names. If the landlord is a company then full name of company, registration number and a resolution re signing authority.
3.    Full Trading name is required for the business occupying the premises
4.    Full description of the premises
5.    Dates of the lease including start date.
6.    Periods of lease and the monthly rental for each period.
7.    Termination and options to renew the lease.
8.    Electricity and water for the account of the tenant
9.    Rates and taxes payable by the landlord.
10.    A clause around the suitability of the premises.
11.    Maintenance of the premises- generally the tenant would be required to keep the premises in reasonable condition. The landlord would be responsible for major repairs.
12.    Alterations- Tenant cannot make alterations without permission of landlord
13.    Insurance
14.    Subletting- can the tenant sublet to another person or business
15.    Damage or destruction- what happens if the premises get damaged and the business cannot operate.
16.    Breach of the agreement
17.    Jurisdiction of the Magistrates court
18.    Variations to the agreement
19.    Whole agreement
20.    Costs of preparing the lease 
21.    Deposit payable- very important
22.    Binding Agreement
23.    Vat