What you need to know about contracts
If you’re wondering who pays the costs of a commercial lease dispute, the answer could be in your lease itself.
Be aware that preliminary documents such as a heads of agreement or disclosure statement have just as much sway for some contract terms if you are signing new lease paperwork.
They set the tone of the upcoming lease agreement, so you will want to have property litigation lawyers look over these documents as well.
When it comes to who pays for the costs of a commercial lease dispute, ideally, each party will pay their own, but this is not always the case.
You can save money by seeking help from the Victorian Small Business Commission (VSBC) with mediation or seeking to negotiate with your landlord on your behalf.
Whatever you do, seek professional property law advice to avoid costly mistakes.
Read on to learn more about the costs of commercial lease disputes.
Be aware before the lease
Your lease may indeed have a clause in it that determines that you are responsible for the cost should a commercial lease dispute occur.
But that’s not the only thing you need to look out for.
The first document you receive might be a heads of agreement or a disclosure statement.
These documents can set you up for failure if you don’t seek property law advice before you sign.
That is because the heads of agreement and disclosure statement are a prelude to the content of the lease and can even be legally binding.
It’s essential that you get advice from property litigation lawyers before you agree to anything in writing that you could later regret.
This precaution includes preliminary paperwork such as a heads of agreement or disclosure statement.
As soon as you sign anything, you are in a legally binding contract, so it is essential that you know what you have agreed to.
Are you wondering what is a commercial lease?
Read the lease carefully and get advice
If you have only just been served your lease, or if you have a preexisting lease, the correct property law advice is the same: read it carefully and get guidance.
It will say in your lease who pays in the instance of a commercial lease dispute.
But the language may be dense, wordy, and hard to understand.
Here’s an example of a real lease cost clause:
The lessee will pay the lessor’s lease preparation expenses including but not limited to costs on negotiation or amendments and the lessors reasonable legal and other costs, charges and expenses of and incidental to the completion and registration of the lease and any surrender or termination and the lessor’s reasonable legal costs and expenses in and about attending any mortgagee’s consent and the production of the title.
This clause, or one like it, may appear in any one section of the lease.
You may find it under ‘general,’ ‘legal costs,’ or even ‘miscellaneous.’
So as you can see, it can sometimes be hard to spot this clause if you don’t have a trained eye like property litigation lawyers do.
It is essential that you get the best property law advice you can find on this matter because an ounce of prevention is worth a pound of cure.
You don’t want to be stuck paying your landlord’s legal costs if you don’t have to.
If you have already signed a lease with this clause in it, turn to experienced property litigation lawyers to see if there is a way of disputing this term.
Want to know what your legal responsibilities are as a tenant on a commercial lease?
How to avoid paying fees
Apart from keeping away from leases that stipulate that you must pay your landlord or lessor’s legal fees, there is another way of circumventing costs.
This method is to opt for alternate dispute resolution or mediation.
You can try this casually by contacting your landlord and attempting to negotiate among yourselves.
Just be aware that your landlord or their lawyer could use anything you do or say in this negotiation against you.
You should also note the time and content of any contact you make, as you may need these records later on if the matter goes to court.
Don’t try to mediate without advice from your property litigation lawyers.
You don’t want to put your foot in it somehow and say anything incriminating, or that strengthens your landlord’s case against you.
There are formal procedures for initiating mediation.
You can raise a case with the Victorian Small Business Commission (VSBC), which will help you find a solution that works for both you and your landlord through low-cost mediation.
Want to know how to resolve a commercial lease dispute?
The ideal scenario
The ideal outcome for a commercial lease tenant is that both parties involved in a commercial lease dispute pay their own legal fees.
At the outset, it is vital to ensure that there are no terms in the lease agreement or the preliminary documents that explicitly state that the lessee (tenant) must pay legal fees for the lessor (landlord).
If you are at the beginning of your lease, you should get property litigation lawyers to look over preliminary documents and the lease itself.
However, if you are already committed to a lease, you can still benefit from seeking property law advice from an experienced member of our team at P&B Law.
Contact us today to get property law advice that can help you easily resolve commercial lease disputes.