Retailers are seeking leases from landlords that allow them to lease out a lot of their land without owning it.
Some leases can last as long as 15 years, while others are longer and require approval from a local government authority.
Here’s what you need be aware of before you sign a lease.
What is a lease?
A lease is a legal agreement that allows an entity to rent space to another person or business.
A lease allows an enterprise to lease space from another entity, which may or may not have the right to sell it to the enterprise or to rent it out for use.
For example, an office leasing lease allows the owner of the space to rent out the space out to another entity.
An individual lease gives an individual the right not to rent from the enterprise at any time.
What type of lease is most appropriate?
Some leases offer multiple terms.
These tend to be shorter, allowing the enterprise to move into the space that the individual leases.
Others may be long and require a written agreement that sets out what rights and obligations the enterprise must adhere to, such as rent control or health and safety requirements.
A company might need to agree to rent a space out for 20 years before the space becomes available for occupancy.
What if the tenant is not interested in renting it out?
An enterprise may ask the tenant to pay a deposit, which is the amount the enterprise will pay the tenant for the space.
This deposit is a type of security that helps the tenant secure the lease.
If the tenant doesn’t want to pay the deposit, the enterprise may apply to a local council for an order requiring the tenant’s landlord to pay it.
If an enterprise wants to buy the space, the tenant can buy it for the enterprise through a private buyer or through a lease with an entity other than the landlord.
If a lease is being negotiated, the rent paid to the tenant must be equal to the amount paid to a third party for the property.
Does the lease contain terms for a security deposit?
A security deposit is the money a tenant pays to the landlord for the right of occupancy.
This money is used to secure a lease or a deposit.
A tenant can only have one security deposit in a lease; if the enterprise doesn’t pay the security deposit, then the tenant has to pay rent and other fees.
A deposit can also be used to pay taxes.
When is a security-determined deposit due?
It depends on the circumstances of the tenancy.
A landlord may deduct from a security charge that is due the amount of the tenant deposit.
If there is a tax-free rent or lease-for-life agreement, the security-based rent or deposit is due on the date of the lease or deposit.
The tenant is usually liable for any outstanding rent.
Is the tenant responsible for any damages to the property?
Yes, if the landlord causes or is responsible for the damage.
The damage can include, but is not limited to, the damage to the space itself, the destruction of any building materials, the deterioration of the property, and damage to any appliances or furniture that were in the premises.
When a tenant loses the security for the first time, the landlord can apply for a court order requiring a new tenant to take possession of the premises or to sell the property and repay the tenant the amount that was paid by the tenant.
Can a tenant rent out his or her space to someone else?
Yes – a tenant may rent out space to other tenants in a common interest area or common lease.
For a lease-by-lease agreement, there are additional terms and conditions that must be agreed to before the lease begins.
For an agreement between two tenants, these additional terms must be included in the agreement.
How do I sign a tenancy agreement?
You should first read the terms of the agreement and check that it’s in full before signing it.
For more information on how to sign a new tenancy agreement, see the National Association of Realtors (NAR) website.
When does a tenancy begin?
A tenancy begins when the landlord and tenant sign a rental agreement.
A tenancy lasts for 30 days after the landlord signs the tenancy agreement.
Where can I find out more about tenant-occupied housing?
The NAR website provides a guide on the tenant-occupied housing issue.
For questions about tenant tenancy, the National Housing Federation provides a tenant-friendly website.
For help in understanding the rental market, the NAR has resources to help you.
How much does it cost to buy or rent an apartment?
The average cost of renting an apartment is around $1,600.
The average price of a new home starts at about $800.
Are there rules about how many units are allowed in a property?
There are no rules about the number of units that can be rented in a building.
However, a building is considered a rental unit for the purposes of rent control.
A building that is occupied by a tenant for more than 10 consecutive days is considered occupied.