Consider a common situation – a rental agreement that requires the tenant to apply for a building permit and conclude the lease depends on the success of this authorization. What happens if the application has not been successful or what happens, if it takes too long and the landlord does not receive rent all the time? It is to be expected that there will be a draft lease, plans and specifications, a copy of the subdivision plan (if any), and details of other “works of the lessor” or others that are attached to the lease agreement. If the parties are willing to enter into the lease immediately, no lease would be required. However, if the lease is to be concluded in about six months, the parties may wish to enter into an agreement earlier to ensure that the lease will be concluded if necessary (and that the other party will not resign unexpectedly). A rental agreement would be necessary even if certain conditions must be met before the conclusion of the rental agreement, for example.B. if either the lessor or the tenant has agreed to carry out work on the premises before the conclusion of the lease. A lease agreement creates a binding obligation for both parties to enter into a lease agreement on agreed terms, subject to the completion of the agreed terms. This creates more security for the parts where the money needs to be spent before the lease starts. A lease is a contract between two (or more) parties to enter into a lease. The contract contractually obliges the parties concerned to conclude the lease agreement either on a fixed date in the future or after the fulfilment of the conditions set out in the contract. To avoid any dispute at the time of completion of the lease, it is preferable to agree on the form of the lease and annex it to the contract. There are a large number of disputes related to leases, particularly when premises are “built for purposes”. Such disputes are common, as both parties suffer a significant loss if the building does not proceed as planned by the parties.
For example, if the building is delayed for any reason, the proposed tenant may have to find alternative premises with a short-term, likely expensive lease. Another risk is that the building may not be constructed in accordance with the requirements of the proposed tenant and therefore not suitable for this purpose. It is customary for litigation to focus on the question of what was to be built and what was actually built. Well-developed agreements can help you reduce these risks. It is important that the negotiated terms on these issues allow and require the completion of the work in a timely manner and in accordance with your requirements. At least a lease agreement should compensate you if the building was not built on time or in accordance with your requirements. When it comes to using the tenant, you should also make sure that an architect or engineer checks all the plans and specifications that are attached to the lease agreement to ensure that the technical aspects of the building are satisfactory. The most common type of rental agreement that our customers need is in the expected form of the second situation above.
There can often be circumstances in which a lessor and tenant have agreed to enter into a lease, but it may not be possible (or preferable) to enter into the lease immediately. . . .