Commercial Leases are a big talking point right now. And we’re only getting started!
So far, we’ve had numerous discussions between landlords and tenants about rent relief. Some tenants literally have no income while their premises remain closed. Yet landlords have costs too, so it’s not fair to expect a freeby.
Next it will be ratchet clauses. Most commercial leases have them – they prevent the rent ever going down when there is a rent review. But what’s going to happen when its rent review time and market rent is 50% less than the current rent!
I’ll tell you. It’s going to be either an unhappy tenant, maybe an insolvent one (and an empty space producing no income for the landlord). Or its going to be negotiation time again, and possibly a reset.
I’m picking most landlords and tenants had never heard of clause 27.5 until three weeks ago. Nor had the bank.
Is there more lurking in that Deed of Lease document? Let us guide you.
Contact russell@queenstownlaw.co.nz
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