We have handled leases in a range of types eg. a retail outlet including shop and restaurant, office premises, warehouse including factory and may others.
Generally speaking, a lease should comprise of the terms and conditions with respect to the issues such as the permitted use of the premises, the commencement date, the termination date and any option period, the annual rental, outgoings and rental review, requirement of a security bond or guarantee, rights and obligations of the tenant and the landlord, insurance requirements, whose responsibility for repairs and maintenance of the premises and the equipment, termination of the lease, hours of trading, etc.
Our legal approach is to explain all the terms and conditions of the lease and all relevant issues associated with the lease to you in plain English to ensure that you fully understand your rights and obligations before you enter into any agreement.
It is particularly essential that tenants should be aware of the following issues:
- the lease must be registered with the Department of Lands provided that the term of a lease is more than 3 years, including any renewal period;
- it is the tenant’s responsibility to inform the landlord of the proposed use of the premises to meet the tenant’s requirement;
- the tenant must make his own enquire in relation to permission from Council or other government authority with respect to permitted use of the premises;
- the landlord's conduct must not be unconscionable or misleading or deceptive notwithstanding that the terms and conditions of a lease always has a clause to the effect that the tenant should make his own enquiry and should not rely on any representations made by either the landlord or the landlord’s agent with respect to the premises.
A majority of the retail leases are subject to Retail Lease Act 1994, in respect of which set out a list of businesses. The key features of retail leases are set out as follows:
- the area of the premises is less than 1,000m2
- the premises are used for retail business
- the landlord has to disclose to the tenants all the important facts including rental and outgoings at least 7 days prior to entering into a lease (“Lessor’s Disclosure Statement”)
- the tenant cannot be asked to pay for the landlord's legal costs unless the tenant requests further amendments to the lease, apart from payment of stamp duty and the registration fee.
- the minimum term of the lease is 5 years including any renewal period unless a certificate is provided to the effect that the lease is for a lesser period
- the landlord cannot ask for any key money (either in cash or other benefit) for the purpose of renting the premises to the tenants or for the lease renewal.
- if a security bond is required, the money is to be held with the Retail Tenancy Unit, a NSW Government body
- the tenant is protected to a certain extent in the event that the landlord wish to relocate the tenant or redevelop the premises
- a specialist retail valuer can be appointed in the event that the landlord and tenant cannot reach an agreement on market rental upon renewal
Other Commercial Lease
It is essential to notice that other commercial lease are not affected by the Retail Leases Act 1994 and the tenant can be required to pay the landlord's legal costs.
In the event that disputes arise, the Retail Tenancy Unit has set up a dispute resolution mechanism in respect of which the parties are encouraged to resolve the dispute through a mediation before the matter is referred to the Retail Leases Division of the Administrative Decisions Tribunal. The parties also have option to the Court to settle a lease dispute, which can be an expensive excise by doing so.