When negotiating, business owners tend to focus on the commercial terms such as gross rental, rent reviews and options to renew. Unfortunately, too many owners miss the importance of other terms in the lease and the impact that these terms can have on their business.
These ‘forgotten terms’ can affect a pharmacy owner’s ability to honour their obligations to the Department of Health in providing continued supply of medicines to the community. These clauses can, in the most extreme cases, cause an owner’s PBS Approval Number to be cancelled and completely destroy the goodwill of the business.
For example, a demolition clause without a suitable relocation clause can give your landlord the right to disrupt or even force the closure of your business without providing you with compensation.
In the event you have borrowings for the business, you may find yourself unable to service your loan commitments, without an asset to realise.
In the event that your premises is eligible for a replacement PBS Approval Number after the completion of works, your landlord may be able take the new premises to market leaving you either without an asset or leaving you paying a significantly higher rental.
Regardless of your ability to negotiate, you should always use an experienced lease negotiator or solicitor to protect your interests.
– Nicholas Galle, Legal Director at AP Group