3.Rental
Understand what is included and excluded from the rental. Often a base cost rental is charged per square metre for the premises.
Over and above that, there may be charges that cover the landlord’s operating costs, parking, rates and taxes, body corporate levies, insurance and consumption charges for electricity, water, refuse collection and sewerage. Know who is paying for what.
4. Lease period and renewal
The initial lease period will be stipulated in the agreement, but leases will often state that any renewal is to be agreed between the parties at a later stage.
If you are looking for certainty this is not ideal, because if you cannot agree on the new lease period, there will be no renewal and the lease ends. Negotiate provisions that guarantee the renewal, provided certain conditions are met and include an objective basis to determine the rental in the renewal period.
If you are a tenant with an asset value or annual turnover of less than R2 million, the Consumer Protection Act may apply to your lease agreement, affording you a number of consumer protection remedies and rights.
The lease must, for example, be in plain language, cannot contain terms that are unfair, unreasonable or unjust, and you may be entitled to cancel the lease early (even if it is for a fixed term) against payment of a reasonable cancellation penalty.
Make sure you know what your rights are in terms of the Act.
5. Deposits, suretyships, guarantees
It is common practice for the landlord to require a deposit to be paid either in cash or in the form of a guarantee. The landlord may also require personal suretyships.
As tenant you may wish to negotiate that this requirement be waived in exchange for a more substantial deposit or parent company guarantee.
6. Occupation Date
If the premises are still being constructed the lease may provide for the agreed occupation date to be moved to a later date to accommodate potential delays.
There should, however, be a cut-off date after which, if the premises are still not available for occupation, either party can cancel. It would be wise to negotiate a rent-free period after occupation within which to install finishes.
7. Installations and reinstatement
If the landlord is contributing towards the cost of installing finishes, specify exactly what the tenant installation allowance is and how and under what circumstances it must be paid.
It is also imperative that you agree on what installations will belong to the landlord and what belongs to you. You may be required to reinstate the premises to the condition they were in at the occupation date.
If the premises were originally in a shell state, the reinstatement obligations could be onerous.
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