Property Leases & Leasing Office Space: What Should You Know?

Also known as Tenancy Agreement, a property lease is the legal contract between the landlord and the tenant and lists out the terms of the lease. For example, you have been looking at commercial property for lease and have found the perfect office for your business through our property listings search. Unfortunately, that would have been the easiest part of the moving process.

Now, you will have to battle with the obscure terminology that is often used in property leases. Here are some common clauses and terms you might encounter when leasing office space:

Tenant
In most property leases, the company is termed the tenant, whilst the employee is the occupant. The lease agreement is signed by the tenant and the landlord.

Landlord
This can refer to the individual who owns one property in a block or complex, or a landed property, or can refer to the developer who owns the entire development.

Tenancy Duration
The tenancy duration of a commercial property for lease can from 1 year to 2 years, with an “option to renew” for a further 1 year, based on the then-market rental or a mutually agreed rental.

Diplomatic Clause
This enables the tenant to terminate the property lease before the end of the property lease period. Tenants are usually able to terminate the lease after 12 months with a couple of months’ written notice to the landlord. This is subject to satisfactory documentary proof.

Security Deposit
When leasing office space, it is normal for a landlord to require a security deposit upon signing of the property lease. When the lease term ends, this is refunded without interest. However, the landlord reserves the right to deduct from the deposit all costs and expenses arising from any breaches of the contract. Typically, the deposit is a month’s value for every one year term of lease.

Stamp Duty
Stamp duty on the property lease is a statutory requirement and is normally paid by the tenant. The amount of stamp duty payable is based on the rental amount of the office space for lease and the period of the lease.

Occupant's/Tenant's Responsibility
The tenant is responsible for ensuring that office space for lease remains in good condition and minor repairs are usually borne by the tenant.

Returning of Premises to the Landlord

Upon expiry of the property lease, the tenant is expected to return the premises to the landlord in the same condition as when moved in. This is subject to fair wear and tear. The landlord will then inspect the premises of the office space for lease and check that there has not been a breach of contract. When the landlord is satisfied, the security deposit will be refunded to the tenant.

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