Before You Lease a Warehouse: 9 Clauses Your Contract Needs

The contract is the law between the parties, and what is written in it governs your relationship with the landlord for the whole lease. The time to negotiate the clauses is before you sign, not after.

1. An exact description of the premises

Built area, land area and yards, address and plot number, with a site plan attached. Specify what the lease includes: offices, loading docks or parking.

2. Permitted activity

State the activity clearly (general storage, food, chemicals…), and confirm the building permit allows it, because some activities require special civil protection measures.

3. Term and renewal

The lease term, whether it renews automatically or by a new agreement, and the notice period each party must give before termination.

4. Rent and annual increase

The monthly rent, the payment date, and any annual increase. A 10% annual increase, for example, means rent rises by about 33% over three years.

5. Deposit

The amount (usually one or two months), the conditions for refund, and how long after handover it is returned.

6. Utilities and meters

Separate electricity and water meters in whose name? What electrical capacity is actually available, and who pays to increase it if you need more?

7. Maintenance

Distinguish between major maintenance (structure and roof), usually the landlord’s responsibility, and routine maintenance from use, usually the tenant’s. Put it in writing.

8. Alterations and fit-out

Can you install racking, a mezzanine or doors? Who owns these at the end of the lease, and must you restore the premises to their original condition?

9. Handover record

A record attached to the contract describing the warehouse’s condition when you receive it, with photos where possible. It is your reference at handback and for recovering the deposit.

Tip

Visit the warehouse during working hours to see truck traffic and the surrounding roads, and ask neighbours about any utility problems.

This article is for general awareness and is not a substitute for having the contract reviewed by a lawyer.