Commercial Leases 

If you own a business, chances are you may need to consider entering into a commercial lease. So how do these differ from ordinary, residential leases?

There are a number of things you need to look out for. This article will cover the four most important things to look out for before signing the dotted line.

1 . Terms of the Lease and Options

The term of the lease is extremely important for business tenants. There often exists a conflict of interest between landlords and tenants with regard to the terms of leases so it is important to be informed and look out for your best interests.

Generally, landlords prefer the security of a longer term lease (for example, 5 or 10 years), whereas tenants usually prefer the flexibility afforded by a shorter lease (3 years is about standard). This is especially the case for start-up business tenants who commonly either go out of business or rapidly expand and require a new lease to expand operations in the near future. Keep in mind that, as mentioned, if the relevant retail lease legislation applies to your lease, there may be restrictions upon the minimum term of your lease.

Another important consideration is whether the lease provides you with an option to renew at the end of the initial term so you have the option to continue trading. This is very important for commercial leases as a large proportion of your businesses’ goodwill may be attached to your premises, so you may want to protect this.

2. Rent and Security

The rent clause is probably the most obviously important aspect of any lease agreement. When it comes to paying out expenses, we all want to keep it to a minimum! The rent clause specifies the the amount of money the tenant must pay to the landlord in return for the landlord providing the use and occupation of the property. Rent is a significant operating expense for most businesses.

The rent for the initial term, as well as any changes to the rent, must be specified in the lease. The most common methods of rent review (i.e. changes in rent) are consumer price index (CPI), fixed percentage increase and market rent. It is important to ensure you will be able to afford any proposed rent increases during the period of your lease and any renewal period to avoid falling behind.

The landlord may also request a security payment from the tenant to protect against the tenant failing to pay rent (i.e. defaulting). This would either be in the form of a bank guarantee by an individual tenant, or a personal guarantee by a company tenant’s directors. The security deposit can be a significant amount of money, usually equal to three to six months’ rent. Therefore, you shouldn’t forget this cost when assessing the affordability of your commercial lease.

3. Termination

Lastly, you should also review the termination clause contained in your commercial lease. Keep an eye out for any clause which allows the landlord to terminate the lease before the end of the term. In most cases, it is highly advised that you seek to have this removed as it causes uncertainty of your lease which can be very damaging for your business. Further, you should be aware of any other circumstances which will cause your lease to be terminated.

Get Advice from a Professional

There are clearly some very important things to look out for when entering a commercial lease for your business.

Each of these factors has the potential to have a major impact on the performance of your business, so it is worth looking into obtaining independent legal advice to protect your best interests. As a potential tenant, if you are unhappy with any aspect of your lease agreement, you should negotiate with your landlord to reach an agreement that suits your needs.

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3 Things that MUST be in your social media policy.

Your Social Media Policy

What is a social media policy?

A social media policy doesn’t need you to be tech savvy – it is a company code of conduct that concerns employee behaviour (i.e. what they post) on social media networks, blogs, messaging apps, forums, email, etc.

Who needs a social media policy?

You might think that if you don’t have a blog, Facebook page or Twitter account you are safe. You are wrong! You are never safe because your employees and customers have social media accounts, blogs and they chat on forums. What they say about your company affects you commercially and legally even if you decide to be just an observer.

That’s why every business needs a social media policy even if you choose to stay traditional brick-and-mortar.

How do you create a social media policy?

The thing with social media is you can’t predict everything that can happen. You can’t just say “If this, then do that” because the environment we operate in changes so fast — the policy from yesterday doesn’t make sense today. That’s why instead of trying to create rules, focus on creating a culture of the way we do things around here.

What do you do with social media policy?

Make everyone sign it! The best way to handle this is to have it attached to employment (and termination) contracts. If you want to make sure all your current employees understand and adhere to it, schedule a 2-hour training session in which you explain the policy, why it is important and when it is to be applied.

Social media policies are very flexible and should reflect the nature of your business.

In our legal experience however, there are a few things that every social media policy should tackle. For the safety of your company, your customers and your employee…

…and here they are:

The 3 things that should be in every social media policy:

  1. Prohibit the sharing of confidential, sensitive, copyrighted, trademark information on personal accounts, as well as, defamation of colleagues or customers.
  2. Explain when and how employees need to identify themselves as such (when talking about products or services) and how they can use the company name or brand.
  3. Set boundaries with customers – when are employees to enter an argument or make a comment, in what way they should respond to customers and how much of the customer experience are they allowed to post online.​

There is much more that can be included. The more complex the organisation, the more complex the policies will get.

One important tip is to consult a professional  first as to what are the regulations of employee – customer communications so that you make sure your policies are not breaking any laws (by posting personal information about a purchase like an address or telephone number of a customer, for example).

Not sure if social media is for you?

Consult with us so we can help your company in this digital age.

Contact us below

http://www.lenoma.co.za

info@lenoma.co.za

Your online business terms and conditions 

Well written terms and conditions, go a long way to protect your business legally. They should also be easily accessible to anyone visiting your website and explain how your online business will operate through clauses such as privacy policy and refund policy.

What follows below are brief explanations of the clauses which will make your website terms and conditions as protective as possible: 

Privacy Policy

A privacy policy is an essential clause to include in your T’s & C’s.You  should include stipulations on how information is collected, what kind of information is collected, who has access to this information, how it is stored and what it is used for.

Cookie Policy

A cookie is a small file that is stored on your computer. It contains information about the website you have visited and allows other websites to tailor your online experience to these personal preferences. For example, when you log on to Facebook, you may see advertisements for the shoes you were just searching for online. This is all due to a cookie! If your website utilises cookies, you should install a cookie policy informing your visitors that cookies are used on your website.

Refund Policy

If your online business involves the sale of goods and services, you need to be clear on your refund policy. The refund policy must be in line with the the Consumer Protection Act and should not prohibit refunds. In certain circumstances, a consumer is legally entitled to a refund, while in others, they may not be entitled to a refund, exchange or credit note. There are similar rules for the provision of services.

Amending your terms and conditions

All good terms and conditions include a clause which allows the website owner or operator to amend the terms and conditions at any time, without notice. You should provide a statement informing visitors that you can amend your terms and conditions without notice.

Copyright

A clause relating to copyright ownership is an important part of your terms and conditions. You are automatically protected by copyright if you have created something new. You don’t need to register your creation or pay a fee, you are automatically granted this protection. However, others might believe that you have violated their copyright. A copyright clause can potentially protect you against liability from visitor’s claiming copyright ownership of anything on your website.

In order to protect yourself further, you should acknowledge any unoriginal work on your website. For example, if you use an image created by someone else, you should state that they took the photo or created the image.

There are several other clauses that you can include in your terms and conditions to cover all your possible liabilities. These include the following:

Website ownership

• Visitor’s agreement

• Liability limiting clause

• Third party material

• Consequences of use

It’s always best to have a professional assist you with these. Give us a call today to schedule your legal consultation or to get yours.

Best,

Team Lenoma Legal

info@lenoma.co.za

+2774 560 8063