Whether you are a landlord or a tenant, our Corporate and Commercial Team has extensive experience in assisting clients through the negotiation, preparation, operation and resolution of all leasing matters. We have experience in preparing and reviewing all forms of leases and licences including:
- Preparation and review of:
Crown Leases and Licences;
Shopping Centre Leases;
Leases between related parties;
Occupancy Licences, including as part of a franchise agreement;
Licences for catering services;
Licences for storage and access
- Renewals of Leases or Licences;
- Variations of Leases and Licences;
- Assignment or Transfer of Leases, including as part of a sale of business;
- Advice regarding breaches of Leases or Licences;
- Negotiations on behalf of Landlords and Tenants in relation to Rent Relief as part of the COVID-19 commercial tenancy relief scheme; and
- Mediation and Dispute Resolution through the Small Business Commissioner.
Our experienced leasing lawyers have prepared the information below to answer some commonly asked questions.
I’ve negotiated the terms of my lease – now what?
Once the key terms of your leasing arrangement have been negotiated (often with the assistance of a real estate agent or broker), it is not unusual for parties to be asked to sign a Heads of Agreement. While you may feel some pressure to sign up to these terms to “secure the deal”, it is important to remember to take some time to consider precisely what it is you are signing.
You should exercise caution before signing a Heads of Agreement as these documents are often prepared with varying degrees of enforceability and can include clauses that are uncommercial or unsatisfactory. You should also ensure that any agreement that you sign accurately documents the terms of your transaction that have been negotiated and does not include any ambiguities or departures.
Regardless of whether the above applies to you or not, we recommend that you instruct us as early as possible to assist you from the start of your transaction and throughout. While we appreciate that engaging solicitors can often be a daunting experience, our early involvement can ultimately lead to a substantial saving in both time and money in the future. Once signed, there is little (if any) chance of amending the terms and conditions of an agreement. While we can provide you with comprehensive advice about the agreement itself, you may find yourself locked in to an agreement for an extended period of time that is uncommercial or particularly unfavourable.
What type of lease do I need?
It is important to understand all of your rights and responsibilities when entering into a commercial lease. What you may not realise is that your obligations, responsibilities and entitlements may be extended by the operation of the Retail Leases Act 2003 (Vic) (“the Act”).
A lease will be governed by the Act if the relevant premises is not intended for use as a residence and that premises will be used “wholly or predominantly for the sale or hire of goods by retail or the retail provision of services”. In addition to this, there is an extensive list of the types of premises that will not be covered by the Act within both the legislation itself and the numerous Ministerial Determinations.
While it may appear clear cut as to whether a lease will fall within the application of the Act, there are (more often than not) circumstances that are not quite so obvious. In these instances, we provide our clients with comprehensive advice regarding the operation of the Act, the options available to them and the associated implications and risks.
What other documents are required?
In circumstances where the Act does apply, landlords are required to provide tenants with certain documents that must accompany the lease, in particular a Disclosure Document in the prescribed form must be provided. Landlords that fail to comply with this obligation are at risk of penalties imposed under the Act. Additionally, the tenant may be entitled to withhold the payment of rent.
If you are a landlord, our Corporate and Commercial Team will assist you with the preparation of these supplementary documents and ensure that you comply with all of your obligations throughout the transaction.
On the other hand, if you are a tenant we can help you with your review of these documents and provide you with quality advice about their contents.
What if I want to sub-lease?
If you are a tenant and you are considering sub-letting a portion or the whole of the premises, you should obtain legal advice as early as possible.
Most leases will include a provision that requires you to obtain the consent of your landlord before granting any third-party the right to occupy the premises. While this is a logical process, it is one that can regularly be overlooked – particularly in circumstances where parties are working towards deadlines and eager to close a deal.
It is important that you take the time to consider what your obligations as the tenant named in your lease are before entering into any agreements that put you at risk of breaching your lease.
What if I want to sell my business?
If you want to sell or transfer your business and the new owner intends to take over the lease of the Premises, again it is important to obtain legal advice as early as possible.
Most leases will require that you obtain the consent of the landlord before any transfer of the lease and prior to the purchaser taking occupation of the premises. The lease will usually set out a process to be followed when requesting the landlord’s consent and sufficient time must be allowed for the landlord to consider the request and for documents to be prepared formalising the transfer.
We are able to provide you with expert advice in relation to the assignment of lease process and assist with the sale of business to ensure all steps are completed in time for a smooth transfer of your business.
How long will it take?
Our skilled team is dedicated to providing a timely resolution for all of our commercial clients. That being said, there are always external factors that may have an impact on the time it takes to complete the transaction.
It is not unusual for parties to reach an agreement regarding the key terms of the lease, however negotiations for the final lease agreement may become drawn out once the parties receive advice from lawyers regarding the implications of the agreement. In these circumstances we will endeavour to adopt a commercial approach that ensures our clients achieve a positive, satisfactory outcome, whilst their interests as landlord or tenant are protected. Engaging lawyers at the outset may also reduce the time it takes to finalise documentation once an agreement on the details of the lease is reached.