Q.1. What is the Construction Clause?
A.1. The Construction clause or the Works clause provides a timeframe for the commencement and completion of a factory/building on the leased premises. In some instances, the clause provides that this construction must be complete within two years from the date of the commencement of the term. In other instances three years are given from the date the Landlord secures all the relevant approvals.
Q.2. Why is the Construction Clause important?
A.2. This clause is important because it ensures that the Tenant places the leased premises into beneficial use within a specified period, which further’s e TecK’s mandate of providing/developing spaces for business to grow.
Q.3. What is required to prevent a tenant from breaching this Clause?
A.3. The tenant must obtain and is responsible under the lease for obtaining all relevant statutory approvals for the building, including Town and Country approval. Copies of the approvals as well as building plans must also be supplied to e TecK before work on the building commences. Once this process is followed and the building is constructed in the stipulated time there will be no breach of the clause.
Q.4. What happens if this clause is breached?
A.4. Where there is a breach of this cause, the Landlord is entitled to forfeit the Lease and exercise its options of re-entry. The landlord may wish to lease the premises to another tenant who has more immediate plans for putting the space to productive use.