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Agreements for Lease

Property & Conveyancing

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An Agreement for Lease is a contract between a landlord and tenant in which the landlord agrees that it will enter a Lease with the tenant in the future. The Agreement for Lease will set out the terms and conditions for entering the Lease and the rights and obligations of both parties. An Agreement for Lease will allow time for any requirements which need to be met before the landlord can give the tenant exclusive possession of the property.

At Burgess Thomson we can assist you in negotiating with the other party and drafting the terms of the Agreement for Lease and the Lease. We can help you understand your rights and obligations under the Agreement for Lease and Lease.


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When is an Agreement for Lease required?

An Agreement for Lease is commonly used in situations such as when the premises to be leased have not yet been constructed or when the landlord has agreed to carry out works on the premises before the tenant moves in. An Agreement for Lease may also be used when a third party, such as the local Council, needs to provide consent to the proposed use of the leased premises. This may be necessary when businesses require licenses or development approval. Another reason an Agreement for Lease may be required is when a former tenant still occupies the premises and will be remaining there for some time but the prospective tenant wants to secure the premises.

What should be included in an Agreement for Lease?

A draft Lease will be attached to the Agreement for Lease so both parties understand the terms being agreed. If the landlord will be carrying out works on the premises before the tenant moves in, the Agreement for Lease should clearly set out the scope of the work. The agreement should also include a defects liability period. This gives the landlord time to rectify any defects before the tenant moves in. If consent is required from a third party, the agreement should include a clause which states that the Lease is subject to the necessary consent being obtained. This ensures the tenant will be able to use the premises for the intended purpose.

Can an Agreement for Lease be terminated?

An Agreement for Lease may include a sunset clause. This type of clause allows a party to terminate the agreement if the other party has not met the conditions of the agreement by a certain date. An Agreement for Lease may also be terminated if either party breaches their obligations and the breach cannot be otherwise remedied.

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