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Though they may appear to be the same thing at first glance, a lease and an agreement to lease are two separate documents with differing objectives; it is therefore important to be familiar with what their differences are. We provide a brief and simple breakdown of the two documents below.

As the name suggests, an agreement to lease is basically a promise. It is a contract between two parties (lessor and lessee), where the lessor agrees that they will, in the future, grant a lease to the lessee.

A lease on the other hand is more formal and creates more than just contractual rights. The key issue rests on whether the parties intend that an estate in the land will, by force of their agreement, be conveyed to one another. If yes, then there is a lease.

So by this point, you may be wondering why bother with an agreement to lease in the first place? In practice, there are 3 popular circumstances in retail leasing where an agreement to lease is preferable:

  1. A tenant has agreed to lease premises that are not yet constructed;
  2. The landlord has agreed to carry out works on behalf of the tenant; and
  3. The tenant needs to obtain the consent of someone prior to using the premises.

The key takeaway from this is to remember that they are in fact different documents and that they serve different purposes.

For more information, please call us on 8410 9294 or send an email via this form.