Landlords… are you sure your retail lease is secure?
Landlords, if you don’t comply with the Queensland retail leasing legislation then your new tenant may be able to terminate their lease in the first 6 months of their new Lease leaving you irate. Before entering into a lease negotiation make sure you know your obligations so your rights a are protected.
You must give to the Tenant before they sign the Lease:
- A Lessor Disclosure Statement signed by you or your agent; and
- A Draft Lease.
These two documents must be given at least 7 days before the new Tenant signs the Lease. Otherwise the Tenant will be able to terminate the Lease within the first 6 months.
You must then ensure you receive from the Tenant:
- Legal Advice Report, completed by the Tenant’s Lawyer,
- Financial Advice Report, completed by the Tenant’s Accountant; and
- Lessee Disclosure Statement, completed by the Tenant.
If you don’t receive these documents before you enter into the Lease then the Tenant could terminate the new Lease within the first 6 months leaving you with no tenant.
I recommend when listing your retail tenancy you provide the agent with the Lessor Disclosure Statement and a Draft Lease to prevent delays when a prospective tenant shows an interest in your property.
Remember your Draft Lease will still need to be reviewed to ensure it fits the circumstance of the new tenancy as there is no single Lease that fits all tenancies. For example recoverable outgoings maybe different from one tenancy to another; inducements to enter the lease will also vary; sometimes the Tenant will be required to provide a Guarantee; each of these changes need to be reflected in the Lease. It makes good business sense to have your leases reviewed by a Retail Leasing Lawyer.
If you have any questions about leasing your premises please Peter Lee, on 3186 6666, our Accredited Specialist in Property Law for an obligation free conversation.