REIQ Best Practice Guidelines v03.23 - Flipbook - Page 91
47. HEADS OF AGREEMENT
(a) Member C&I Agents may prepare a heads of
agreement on the basis of their Client’s
instructions of the material terms and
conditions of a lease for the property including:
i.
what rent is offered (including or
excluding GST);
ii.
how outgoings are payable (gross
lease / fixed amount / pro rata);
(b) Member C&I Agents should obtain a
completed and signed heads of agreement
from the prospective lessee (with any
amendments clearly shown and initialled by
the lessee) for the Client’s consideration.
(c) Member C&I Agents must not make any
representations or give any warranties to the
Client or the lessee about the permitted use of
the property, the zoning of the property or the
classification of the property.
48. THE LEASE
iii.
iv.
type and frequency of rent reviews (CPI
/ fixed / market review);
what security will be taken (amount /
bank guarantee or security bond);
v.
if guarantors are required (director
guarantees);
vi.
the term of the lease and if there are
any options;
vii.
if there are any included fixtures,
fittings or chattels and any conditions
of their use;
viii.
the permitted use of the property;
ix.
if there are any special conditions
(prepared by the Client’s Legal
Practitioner);
x.
if there are any incentives offered by
the Client;
xi.
if the lessee’s business requires certain
approvals / licences / certifications to
operate at the property, special
conditions the Client may require;
xii.
if the Client has any conditions to enter
the lease (such as having their legal
costs paid or any deposit paid in
advance); and
xiii.
if the prospective lessee will incur
forfeiture of fees paid in advance if
they do not proceed with the lease.
REIQ BEST PRACTICE GUIDELINES
V08.23
(a) Member C&I Agents must not provide advice
or determination as to what type of lease is
appropriate for their Client and the property.
(b) If a Member C&I Agent is instructed to prepare
a lease by a Client, the Member C&I Agent
must provide a statement to the Client that:
i.
the Member C&I Agent cannot provide
legal advice about which type of lease
is appropriate for the property, the
relevant disclosures that are required
outside of the standard REIQ
Commercial Tenancy Agreement;
ii.
that the Client may incur significant
financial or legal consequences if they
do not receive specific advice about
issues that relate to the property which
the Member C&I Agent cannot provide
advice for; and
iii.
that the Member C&I Agent has
recommended the Client obtain
legal advice and instruct their legal
advisor to prepare the lease for the
property.
Listen to the REIQ
Property Brief:
Commercial Leases –
why outgoings are so
important podcast
91
