South Auckland Leasing Lawyer For Advice With Financing Plant And Premises
Leasing is a common method of financing either a sale or a purchase of a product or service. But what is involved in leasing? What do the different parties need to do and what are the obligations?
As with any legal document, it is best to talk to a local South Auckland leasing lawyer to make sure you understand all aspects of any lease you are thinking of signing.
What Is Leasing?
In New Zealand law, for a contract or lease to be binding the:
- Either the agreement to lease is in writing, or the terms of the agreement are in writing;
- Both parties, tenant and landlord must sign the lease document.
There are two situations where this does not apply. The agreement can be enforced if:
- an oral agreement has been partially carried out.
- and short-term leases.
If you are unsure, consult a South Auckland leasing lawyer.
Are Oral Agreements to Lease Binding?
In New Zealand, a contract for sale or hire of goods must be made by way of writing and signed by both parties. However, if there are no written terms agreed upon between two parties, then they can still enter into a valid contract through verbal agreements.
The law does not require that all contracts be put in writing. However, it will only enforce those which are in writing. If one party has fully performed their obligations under an oral agreement but the other party refuses to perform theirs, then the first party may sue them for breach of contract.
What Is A Deed Of Lease?
A deed of lease will usually be drafted by a leasing lawyer who specialises in drafting deeds of leases for landlords and tenants. The main purpose of a deed of lease is to set out all the details of the tenancy between landlord and tenant. It includes:
- Who owns what
- What rights are granted to the tenant
- How long the term of the lease lasts
- Whether there are any restrictions on how the property can be used during the term of the lease
- Any obligations the tenant has towards the landlord such as paying rent, keeping the premises clean etc.
How Do I Get My Own Legal Advice About A Lease?
If you want to know if it’s possible to change the terms of a lease after signing, then you should ask your lawyer at the time. However, it is a good idea to talk to your leasing lawyer at the start so they can advise on what to ask for, what to exclude, and give their experience in drafting or reading leasing documents.
Commercial Property Leases
Some commercial property leases may only have an agreement to lease, rather than the more stringent deed of lease. Though this is easier, the lessee’s legal situation is more secure with a signed deed of lease. This is useful if:-
- people want to sell their business which means passing the premises to the new owner of the business. The landlord needs to agree, and a deed of lease will be required in most cases;
- when someone wants to assign the lease or sublet;
- a bank will generally need one if businesses want to get a loan;
Is It Only Property Where You Need A Lease?
The simple answer is no. Leasing is very common in commerce, especially in business-to-business transactions. Types of lease contracts include:
Property leases
- Commercial leases – These types of leases usually cover large amounts of space over many years. They tend to involve complex financial arrangements such as interest-only loans, where the tenant pays off the loan at regular intervals.
- Industrial leases – These types of deals are used by businesses who operate from industrial premises. They usually last less than five years, although some companies use these kinds of leases for much longer periods.
Leases for equipment
- Equipment leases – Lease contracts involving machinery and other items of fixed capital are known as ‘equipment leases’. An equipment lease contract typically covers the purchase price of the item plus finance charges. It does not normally provide for rent payments until after the end of the term of the lease.
- Computer software licenses – Software licenses are another type of lease contract. In most cases, computer software licensing involves the transfer of ownership rights to the purchaser of the license.
Leases for vehicles
- Vehicle leases – The vehicle lease contract is similar in nature to the equipment lease contract. However, it differs in that the lessee owns the vehicle outright when he takes possession of it. He can then either keep the car for himself or return it to the original owner.
- Motorcycle/motor scooter leases – Similar to the above, but motorcycles and motorbikes are leased instead of cars.
- Aircraft leases – Airplanes and helicopters are also leased under an aircraft lease contract. This kind of deal allows the buyer to own the plane once all payments have been made.
- Boat leases – Boats are leased under boat leases. Like airplane leases, boats are sold under an aircraft lease contract, which means the seller retains title to the vessel while the buyer becomes its new owner.
- Other forms of transport – There are various other ways of transporting people and goods around the world. For example, there are bus and coach operators, taxi drivers, trucking firms, shipping lines, airlines, railways, ferries, cruise ships, etc. All of them fall into one category or another.
- Real estate – Land, buildings, houses, flats, offices, shops, factories, warehouses, storage facilities, landfills, parking lots, shopping malls, hotels, restaurants, bars, clubs, cinemas, theatres, swimming pools, gyms, spas.
Leasing is a convenient way to gain use of an entity however, remember that it is a legal document. That mean you need to talk to a competent South Auckland leasing lawyer. McVeagh Fleming in Manukau City can help.