Introduction to Leasing

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Leasing as a Specialty

Leasing is a very profitable activity for many commercial practitioners and many commercial practitioners are leasing specialists.

In larger markets like Metro Vancouver usually, leasing specialists would specialize in a product type and a geographic area, e.g. downtown office, suburban office, industrial parks, retail. The specialty undertaken is a function of individual interests and company requirements.

However, in smaller markets like Central Vancouver Island, usually due to the lack of big inventory of a specific asset class and perhaps because of lower lease rates, a leasing practitioner may have specialized in the geographic area with various types of property.

There also are many practitioners who do both leasing and sales. They see leasing as a means to maintain their cash flow between sales.

In addition to commercial leasing, investment brokers in particular also need to have a comprehensive understanding of the Residential Tenancy Act and residential tenancy 

Tenant Representation

There are many practitioners who act solely as tenant representatives, much like a buyer's agent. In the commercial field, many of the landlords are large, well funded companies and institutions. They have large portfolios and are always in the market. Thus, they are very well informed and often in a much better negotiating position than a tenant who only enters the market every five or ten years. In our market area there is a mixed of both large landlords as well as those with single or smaller portfolio.

The Lease

The lease defines a "leasehold" interest in real estate. A leasehold interest is a lesser interest than fee simple, which is the interest in real estate vested in the owner. A lease is for a fixed term, and, the reversionary interest remains vested in the owner. It is advisable that all lease agreements regardless of the length of the lease term be reduced to writing. See Section 59 of Law and Equity Act

The Leasing Process

As commercial practitioners our role is to assist our clients to get agreement on the business terms of the transaction. This is done in the preparation and negotiation of an Offer To Lease. Once the parties have agreed on the basic business terms, the drafting/revising of the actual lease document is handled by the clients' legal advisors. Usually, but not always, the lease is drafted by the landlord's lawyer.