Timpany Walton has extensive experience in commercial leases and can assist you in navigating the recent changes to the standard TLANZ Deed of Lease template.
Rent Reviews
The seventh edition of the Deed of Lease introduces greater flexibility in how rent reviews are conducted. Parties to a lease have more options, including the ability to set minimum and maximum limits on rent adjustments and to choose between hard, soft and semi-soft rent rachet provisions. Landlords also have the option to include fixed rent adjustments as part of the lease terms. Additionally, the new edition allows for the inclusion of interim rent provisions, giving both Landlords and Tenants more certainty over rent variations during the lease term.
Outgoings & Insurance
Landlords must now provide their Tenant with a yearly outgoings budget, and they have the ability to specify a set amount of insurance excess payable under the lease. If an amount is not specified, the default maximum is $5,000 plus GST.
Under this new edition, unless otherwise removed, the tenant will be responsible for paying both the insurance premium and any excess as an outgoing. Furthermore, clause 24.1 introduces a new obligation for landlords to notify tenants in writing if insurance is unavailable for the property and to consult with the tenant regarding the reasons for this.
Aligning with Current Market Practices
A number of conditions in the previous lease edition no longer reflected standard commercial leasing practices in the current market. To address this, several key updates have been made:
- Outgoings and their definitions have been broadened to provide greater clarity for both parties as to what costs the Landlord can and can’t pass on to the Tenant.
- Various standard clauses have been revised or added to better align with current industry norms, such as the inclusion of new health and safety clauses and amendments to the rent abatement and assignment provisions.
Greater Flexibility for Lease Parties
This new edition of the Deed of Lease introduces additional flexibility, allowing for such things as:
- Custom notice periods before lease renewal.
- Additional security options such as bank guarantees or rental bonds.
- A more streamlined approach to documenting fixtures and fittings, premises plans, seismic reports and car parking, which are now able to be detailed in separate schedules.
Need Assistance?
If you are looking to enter into a commercial lease, be it as a Landlord or as a Tenant, the team at Timpany Walton is here to help. Contact us to ensure your lease documentation aligns with the latest changes and best suits your needs.
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