| Lessor |
The building owner i.e. landlord.
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| Lessee |
The Tenant
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| Agreement to Lease |
A preliminary step sometimes taken to record the essential terms of a lease arrangement
agreed between a prospective lessor and lessee. The executed deed of lease supercedes an agreement to lease
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| Deed of Lease |
The document recording the terms, conditions, rights and obligations that have been agreed
between the lessor and lessee.
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| Sub Lease |
When a lessee under a lease has surplus space and wishes to lease that space to another
occupier he can, with the consent of the lessor, arrange a sub-lease to a third party.
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| Assignment |
If a lessee, during the term of the lease, no longer has a requirement for the space leased, the
lessee can transfer his rights under the lease to another party. The consent of the lessor is
generally required but cannot be unreasonably withheld. The assignor is the party granting the
rights under an existing lease.
The assignee is the new lessee, receiving the benefits of the lease. Unless explicitly
extinguished the assignor (original lessee) still has an ongoing liability under the lease after
assignment should the assignee neglect the lessee's lease obligations.
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| Monthly Tenancy |
A casual lease arrangement which can be terminated by either party giving to the other, one
calendar month's written notice.
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| Ratchet Clause |
Some lease documents will contain a ratchet clause which will apply at rent reviews. The effect
of this clause is that the rent payable by the lessee upon review, cannot be less than the rent payable in
the preceding period. In summary, the rental level can only stay the same or rise.
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Auckland Law Society
Lease Form |
The most common lease form used for industrial leases.
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| Net Lease |
A lease form where the tenant pays a base rent (net rent) direct to the landlord and assumes
direct responsibility for paying the rates, building insurance, body corporate levy, and other
normal building operating expenses.
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| Gross Lease |
A lease form where the tenant pays one rent (a gross rent) and the landlord assumes
responsibility for paying rates, building insurance, body corporate levy, and other normal
building operating expenses.
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| Net Rent |
The base rent. Does not include rates, building insurance, body corporate levy, and other
normal building operating expenses.
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| Gross Rent |
Rental inclusive of a base rent, rates, building insurance, body corporate levy, and other
normal building operating expenses.
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| Outgoings |
Also known as building operating expenses and includes rates and building insurance.
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| Gross Building Area |
The floor area measured to the external perimeter's of a building and includes the central
service core, balconies, common areas and entry foyers.
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| Net Lettable Area |
The net usable and rentable space and excludes, for example, lift wells, public foyers and
common areas.
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| GST |
Rentals are generally quoted net of GST. However, GST is payable on rental and building
operating expenses.
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