For many commercial tenants in New Zealand, leases are often based on the standard terms of the Auckland District Law Society Deed of Lease (ADLS Lease). Here are some essential aspects of the current version (Sixth Edition 2012 (5)) that are frequently overlooked.

1. Business Use:

Ensure that the agreed-upon business use in the lease aligns with your plans for the premises. A narrow specification may hinder any changes to your business’s nature, potentially breaching lease terms.

2. Outgoings:

The lease outlines the initial outgoings charged to tenants. While negotiable, landlords can only charge for actual incurred outgoings related to the tenancy.

3. Rent Reviews:

The ADLS Lease offers two rent review options: CPI or market-based. CPI reviews provide cost-effective, predictable rent adjustments, while market reviews compare rents with similar premises, often involving independent valuation.

4. Make Good Obligations:

Beyond cleanliness, tenants are responsible for reinstating leased premises to their original condition at the tenancy’s start. This includes undoing alterations and ensuring the premises match their initial state.

Before committing to a commercial lease, understanding its terms is crucial. If you require guidance on commercial leases, reach out to us for assistance.