Special features apply to lettable areas at airports. Expert drafting of lease documentation is essential. Our industrial and airport leasing lawyers can assist with all your requirements.
Leasing of maintenance and workshop space at airports requires industry knowledge which only comes with experience.
All of the elements discussed below need to be considered to ensure – whether acting for a landlord or a tenant – the documentation produced meets the requirement of this type of use and the particular building in which the business is to operate.
Retail space at airports also requires special consideration when documenting or reviewing the airport lease. Uniquely, such leases must cater to the particular nature of the airport premises as well as the specific nature of the business, the tenant’s business.
A dispute between a retail or commercial landlord and its tenant can arise from many circumstances. Experienced airport leasing lawyers are vital to expertly assess and prepare the arguments on behalf of a lessor or a lessee to determine if leasing disputes is required. Find out more
Negotiating a commercially viable lease requires you to know and understand the key terms and conditions contained in the lease clauses. – ATO
We can assist with the entire range of services, including:
Airside operators’ leases;
General aviation operations such as skydiving and other GA recreation uses;
Off-airport Leases and other occupancy contracts;
Airport terminal retail leases;
Permits from regulatory bodies such as Airservices Australia.
Issues to consider in every lease
Leased area & rent
A lease does not need to specify an accurate floor area unless the lease is intended to be registered.
Most leases will, however, specify a floor area. If space has only recently been constructed or remodeled, the Letter of Intent may specify an estimated area that is “subject to survey”. It may also specify that the rent is to be calculated by reference to the survey floor area and a specified annual rent per square meter.
In those cases, the survey will proceed before the lease is lodged for registration so the floor area and rent details can be inserted prior to lodgement.
Tenants may be asked to pay the cost of the survey.
Most often leases are for 3 years or for 5 years. Frequently they contain one or more options for the same number of years.
Once a tenant signs up for April’s binding lease for a particular term, it is obliged to pay rent for the entire term regardless of whether or not it continues in occupation.
Landlords are entitled to expect rental growth and this may be accomplished by allowing for annual rent increases (usually on the anniversary of the commencement date) either in accordance with CPI increases, a fixed percentage, or a “market review”.
Some leases specify that the tenant must also pay a proportion of outgoings for the building in which the tenancy is located. Usually, the share of outgoings is the proportion which the floor area of the leased premises bears to the total lettable floor area of the location.
In most offers the lease must be accompanied by a deposit which is credited towards the lessee’s rent obligations if the formal lease is negotiated and signed quickly or if not is paid to the less the or to defray its legal expenses.
A landlord may also require a bank guarantee to be provided to cover 3 months or 6 months of rent in the event of default. This allows the landlord to go to the tenant’s bank and collect cash to compensate it for the default, up to the maximum value of the guarantee.
Lessees who are “small businesses” with up to a maximum of 20 staff including casuals, will likely attract the “unfair terms” prohibition mandated in the Australian Consumer Law if the total rent for the period of lease does not exceed $1 million.
The most common way of entering into retail or commercial leases is firstly by way of a “Letter of Intent” which sets out the fundamental commercial terms: start date, term, estimated floor area, names of lessor and lessee, annual rent, the proportion of outgoings, options, read escalation mechanisms and guarantee requirements.
The Letter of Intent is usually in the form of an offer by the prospective lessee to accept a lease on the terms stated.
Because the formal lease contains numerous obligations etc that can’t be included, a countersigned Letter of Intent is usually not a final document. A binding Letter of Intent is also possible if preferred.
Regardless of your circumstances, our airport leasing experts will help minimize the costly risks of starting and operating your business. Contact us today!
Looking to get an assessment on the prospects of your success in an airport leasing dispute? Try our free interactive assessment tool to see whether the issues in your dispute are likely to resolve in your favour.
Leasing of maintenance and workshop space at airports requires industry knowledge which only comes with experience.