In this case study, we summarise our work for a client recently which highlights the importance of proper legal advice when it comes to leases and other commercial arrangements for small businesses, particularly new ones. By seeking out professional legal advice, our client was able to secure considerably better commercial outcomes for their nascent business.
Birchgrove Legal recently assisted a client with the purchase of their first business — a successful café in the heart of Sydney CBD.
The client approached our firm seeking legal advice after he was sent the original offer to lease the business.
The lease contained a number of clauses which our client was not familiar with. It was clear that he was wholly unaware of his rights, liabilities and obligations when it came to purchasing the business.
We recognised early the importance of negotiating the original offer until the lease terms were adequate and suited our client’s needs, especially as a business owner embarking on their first substantial, independent commercial venture.
Given the uncertainty of the COVID-19-driven economic situation, it was all the more imperative to consider the commercials of the arrangement to ensure commercial outcomes at a time of difficult trading conditions.
Our work on the case and the eventual outcome highlight why it is essential to negotiate terms concerning rent payable, options to renew, operating expenses and other related costs.
Eventually, through considerable negotiations and careful attention to detail, we were able to negotiate a lease which was suitable to our client’s commercial interests, but one which he would not have secured had he continued to go it alone.
This brief case study brings into sharp focus the importance of business owners not being pressured into signing a lease without first seeking proper legal advice on the offer which has been made to them. Negotiation of lease terms should be an obvious first step for those seeking out their own business premises, and the outcomes they secure can frequently result in tens, if not thousands of dollars’, worth of savings over the course of a few years.