Posted by Elizabeth Gore-Jones
on 12 March 2024
Most commercial and retail shop leases provide that a tenant is required to refurbish the premises throughout the term of the lease.
It is important that the tenant is aware of the following:
1. When the refurbishment is required to take place. For example, the lease may provide that a tenant is required to do this every 3 years or just before the lease comes to an end; and
2. What refurbishment requires. For example, refurbishment may require:
(a) Painting the interior of the premises;
(b) Painting the exterior of the premises;
(c) Replacing the flooring; and
(d) Bringing the premises up to the standard of the centre.
These are all items which can be negotiated between the parties.
Be aware of clauses mandating refurbishment in a lease's final months as the tenant is usually required to return the premises to an empty shell or the condition the premises was in at the beginning of the lease. This may be a complete waste of money.
Do not let lease terms catch you off guard! Understanding the refurbishment clause is crucial for tenants in commercial and retail spaces. Contact us for guidance with your lease agreements!
