A reader would like to know whether it is the landlord or tenant’s responsibility to pay for the preparing and drafting of a lease agreement.
An agreement of lease is often drawn up following the advertising of a building or property for rental.
This occurs where a prospective tenant expresses interest or concludes a term sheet setting out certain principles applicable to the proposed contract.
A lease does not have to be in writing, but the benefit this offers is that in the event of a dispute there is a written record that can be referred to in an attempt to resolve the disagreement.
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There are several essential elements which must be included.
The parties to a lease – the landlord and the tenant – must be clearly defined. The next thing is that the immovable property that is being let must be determined.
In addition, the duration as well as the rental in respect of the property being let must be stipulated.
It is not unusual for numerous other aspects to be included in the agreement.
The more clearly the agreement between the parties is set out in the contract, the less the possibility of disagreement at a later stage.
It is common for the agreement to also deal with aspects like insurance, duties of the landlord and tenant, alterations and improvements and consequences of termination and breach.
Another aspect included in the contract is to assign to one of the parties the responsibility for the costs incurred in the negotiation and drafting of the lease.
This party may be either the landlord or the tenant, or the costs may be apportioned between them by agreement.
Where this type of approach may vary is upon the renewal of the lease.
Either party may insist that the other party pay for the costs associated with the negotiation and formalities for renewal. This makes it clear that the issue of who pays for the costs of drafting is merely one of agreement between the parties.
It is up to each contracting party to ensure that their interests are sufficiently protected and that the final product summarises the intention of the parties involved.
A simple templated agreement may not be enough.
Both landlord and tenant need to ensure that they are aware of their responsibilities as set out in the agreement before finalising it.
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