Leasing

[caption id="attachment_15312" align="alignnone" width="300"] Leasing in Queensland[/caption] Retail Shop Leases The Retail Shop Lease agreement between the landlord and tenant is not the only thing that the parties must consider in their relationship. The Retail shop Leases Act overrides the terms of the lease. The laws relating to...

There are lots of opportunities for things to go wrong when drafting a lease but, in these three situations the consequences are particularly unpleasant.1. Failure to obtain a personal guarantee. Most leases are signed in the name of a company. If a tenant manages to get a lease in the name of a two dollar company and the requirement for a personal guarantee is forgotten then

If your Tenant has failed to pay rent or is in breach of some other essential term of the Lease, you may decide that terminating the Lease and searching for a new Tenant is the best way for you to limit your losses.   It may be, for instance, that the tenant is impecunious.

Before you will be able to “change the locks” and re-enter your property, Section 124(1) of the Property Law Act provides that you must first serve on your Tenant a notice which states the breach complained of and what the Tenant has to do to remedy the breach.

It is in your best interests that any breach notice is issued correctly the first time.  You must ensure that the breach notice is factually accurate and complies with the technical requirements imposed by law.

Providing a defective notice can be costly.

Firstly, a defective notice may give the Tenant the ability to have the notice set aside. This would force you to re-issue the notice thus delaying your efforts to terminate the Lease. This may allow the Tenant to continue to occupy the Premises while in breach until such time as the notice is re-issued correctly.

Do you lease premises for your business? Many business owners do not realize that when they sell their business and assign their lease, they may remain liable to the landlord for many years after the assignment.  If the buyer (the new business owner) can't pay the rent then the landlord may come looking for the previous tenant to cover the loss.  Is that you?

Many leases actually provide that an assignment of the lease does not release the previous tenant from liability to the landlord. Don't despair!  Read to the end of this article where we make reference to some legislation that may assist if you are a retail shop tenant.

A tenant may have  no legal right to complain, if a landlord is charging "unfair" rent which is well above the amount that a valuer might say is market rent.  The lease determines the rent that is charged.  In better times a deal may be struck between the landlord and the tenant.  Over time circumstances and the economy may change.  Rent is not however determined by the rental market at any particular time.  Rental is determined only by the lease. But there may be other things which a tenant can do.

You may have heard the saying. "A row is never about, what a row is about".  In other words when people argue with each other, they often argue about the things which did not cause their initial dissatisfaction.  Watch yourself in your next argument with your partner.  Does the focus of that argument keep changing?  It is the same in law.

I attended a seminar held by the Franchise Council yesterday. The speakers were Ralph Edwards and Phillip Chapman of Lease 1. A link to their website is http://www.lease1.com.au/contact.html

There were a number of good points made which have caused me to consider the process of negotiating a lease. We suggest that you always obtain legal advice before proceeding to any negotiation. Here are some suggestions:

1. Pressure on a tenant builds as the date for renewal approaches. Tenants are well advised to begin negotiations relating to obtaining new lease at least 12 months before the current lease expires. Institutional landlords are very organized and actively plan how they can get the best deal for their shareholders. Landlords know that without the lease there is no business.  As the end date approaches, pressure mounts on the tenant, so that the business is not lost. The tenant has more options while a significant part of the lease term remains and so this is the best time for a tenant to negotiate.