Waikato Business News | January 12, 2024

8 WAIKATO BUSINESS NEWS
JANUARY 2024
ADVERTORIAL
Commercial Leases ?
– Agreement to Lease or
Deed of Lease
University opens
new business hub
Commercial property lease
transactions consist of
formalising the relationship
between Landlords and
Tenants. Two key documents in this
context are the Agreement to Lease
and the Deed of Lease, with each
serving a specific purpose.
Agreement to Lease:
The Agreement to Lease is typically
the first document in the commercial
leasing process, setting out the
broad commercial terms of the
lease – things like the length of the
lease, commencement date, how
much rental will be, the rent review
provisions, along with any required
works or conditions to be met. It is
a legally binding document, albeit
that it may be conditional for a period
of time, providing an option to not
proceed if the conditions are not
met. This document is particularly
useful when parties want to quickly
establish the basic terms of the lease
without delving into the extensive
details typically found in a full lease
agreement.
There are also occasions where
parties may instead agree to an
alternative Heads of Terms type
document, that highlight the general
terms, but in many instances are nonbinding.
Several Key Elements of an Agreement
to Lease:
Basic Terms: The Agreement to Lease
covers fundamental aspects such as
the names of the parties, the property
details, the term of the lease, and rental
amounts.
Conditions: It may include
conditions that need to be met or
satisfied before the lease becomes
binding. These conditions might involve
obtaining necessary consents, permits,
or completing certain works on the
property. For example, a lease may not
start until the Landlord has finished
building the premises. In this case the
Agreement to Lease will only state an
estimated commencement date. The
Deed of Lease will then record when
the building was finished, and when the
lease started. It is always good to know
exactly when your lease commenced,
so you know exactly when it will end.
Negotiation Platform: The
Agreement to Lease serves as a
platform for negotiations through
an offer and counter offering, where
necessary. Once the parties agree on
the essential terms and it becomes
unconditional, they can proceed to
finalize the more comprehensive Deed
of Lease in due course.
Deed of Lease:
Once the parties have a fully
executed Agreement to Lease,
and all conditions have been
satisfied, the next step is for
the Tenant and the Landlord
to enter into a formal
Deed of Lease, which
is usually prepared by
the Landlord’s lawyer.
The most common
type being the ADLS
(Auckland District Law Society) form,
though some Tenants and Landlords
may have their own bespoke versions
or standard modifications. The latest
version being the ADLS 6th Edition
2012 (5) form, with each party normally
paying their own legal costs associated
with the negotiation and preparation of
both the Agreement to Lease and Deed
of Lease documents.
Other Key Components of
a Deed of Lease:
Rights, Responsibilities and
Obligations:
Enumerates the rights and
responsibilities of both the Landlord
and the Tenant, including maintenance
obligations, use of the property,
reinstatement at the end of the lease
and compliance with laws.
Termination and Renewal:
Provides details on circumstances
under which the lease can be
terminated, as well as any provisions
for renewal or extension.
Dispute Resolution:
Includes provisions for resolving
disputes that may arise during the
lease term.
Alterations and Improvements:
Governs any alterations or
improvements the Tenant may wish to
make to the property.
In summary, the Agreement to
Lease and the Deed of Lease play
distinct roles in the commercial
leasing process. The former initiates
negotiations and establishes initial
terms, while the latter formalizes the
agreement, providing a comprehensive
legal framework for the Landlord-
Tenant relationship. Both documents
are integral to ensuring a clear and
mutually beneficial commercial
property transaction and relationship.
As outlined above, when you sign an
Agreement to Lease you are bound by
the terms of a Deed of Lease as well, so
it makes sense to know exactly what a
Deed of Lease contains.
Having a final Deed of Lease in
place is important if you ever wished
to assign the lease to another party.
Clause 6.1 of a standard ADLS
Agreement to Lease states that
the Agreement to Lease cannot be
assigned.
Under REAA 2008 we (real estate
agents) are required to recommend
to all parties, before entering into a
lease arrangement, that they should
seek legal and other professional
advice prior to signing any lease
documentation. Engaging an
experienced commercial lawyer
for advice in these circumstances
is very important, particularly for
those who are new to leasing.
Ready and waiting – inside the university’s new hub.
A new business precinct and co-working
space at the Hamilton campus is designed
to strengthen ties between the business
community and the University.
Hiko hub will provide businesses with
the flexibility of a co-working space and
the benefits of the campus’ unique grounds
and amenities. Businesses that join the
hub will also have opportunities to connect
with students through work experience
opportunities, including work-integrated
learning.
Waikato University chief operating officer
Jim Mercer, said the project was a positive
step for the university and the Waikato
business community.
“This concept has been brewing for
several years, driven by our commitment to
work more closely with local industry and
Straight teeth – and good luck
CONTINUED FROM PAGE 5
When she became practice manager for
an ear, nose and throat specialist, she was
sure it was the best job of her life. “I learned
how to run people and be a boss, and having
to wear smocks meant I didn’t need a full
working wardrobe.”
She worked through lunch so she could
pick the kids up after school and waitressed
three nights a week.
The next seismic event occurred when she
met established businessman Bill Foreman
and his then wife, Mary Pat. Bill was
running Trigon, based out of Hamilton’s
Foreman Rd. A nagging hearing problem
brought him into the practice and the family
soon bonded with Diane over their shared
experience as adoptive parents. Bill regaled
Diane telling her story to a packed U3A meeting.
Photo: Bruce Hancock
make smarter use of our space. Hiko hub
addresses a genuine demand from small
businesses in the region seeking a vibrant
and contemporary workplace while being
part of a larger ecosystem.”
Tech company Resolution8 has signed
on with the hub and will be moving into the
space early this year. Director Peter Gilbert
said the close ties to an organisation known
for its strong tech credentials was a drawcard.
“From establishing New Zealand’s first
internet connection in 1989 to leading the
way now with their Artificial Intelligence
Institute, the University has long led the
way in tech. Resolution8 prides itself
on innovation, so it feels like a natural
alignment,” he said.
The hub gets its name from the Māori
word for lightning or “to ignite”.
her with business chat and gave her copies
of National Business Review to read.
Time passed and Diane, seeking more
in life, left the practice and became a real
estate agent. Later, when she dropped into
her former boss to get property papers
signed, she stumbled across Bill. Mary Pat
had died a week earlier and conversation
was awkward, but a month later, Bill invited
Diane for tea. She was sure he would offer
her a job as a secretary, or perhaps as nanny
for his children. Several similar meetings
followed until Diane asked when he was
going to offer her the job…instead, he asked
her to marry him.
Mary Pat, concerned at leaving young
children for Bill to raise alone, had
prophetically reminded him of the sharp
young woman at the ENT practice. Bill
conducted his own appraisal, something
Diane later learned was a key component to
his business success, and the two married
in 1988.
She was instantly propelled into a different
world. “It was the best decision I ever made
… he changed my life,” Diane said. “First, I
learned to be a corporate wife. We travelled
the world and I’d sit in boardrooms and
meet with his directors. Then the third
big thing happened. Bill had a stroke and
asked me to go onto the board at Trigon as
a director… he wanted me to take it over.”
Despite her terror, she deftly navigated the
misogynism and mastered the challenges.
When they sold Trigon in 1995, they pursued
numerous other business interests that took
them across the globe until Bill’s death in
2017 marked the end of an era.
“I learned so much from him,” she said.
“He taught me that people are the biggest
asset to any business… through him I
learned how to select and hold on to the
best people.”
Diane continued to blaze her own path
as a highly respected businesswoman. She
reckons she was lucky to learn from the best,
and in 2015 published her best-selling book
on entrepreneurship, In the Arena.