Commercial Leases in NSW: Common Questions & Answers

Written on the 2 May 2017 by Gavin Hanrahan


Commercial Leases: Q&As

1. How long can a lease term be?

Generally there is no restriction on the term of a Lease, but it must be fixed with certainty.

 Related Articles: Commercial Leases
 1. Understanding the Basics
 2. Common Questions & Answers
 3. Get Them In Writing

2. Is stamp duty payable on the creation or assignment of a lease?

Since 1 January 2008, stamp duty has not been payable on a Commercial Lease executed on or after that date. However, it is still payable on the transfer or assignment of a Lease.


3. Must the landlord allow a tenant to renew a Lease?

If the Lease contains an option to Lease for a further term, the landlord will be bound by that option.


4. Is the landlord allowed to charge any amount for rent?

Essentially "yes". No restrictions apply to the amount of rent that can be charged for commercial and industrial premises. However, during the term of the Lease, rent can only be increased in accordance with the rent review provisions in the Lease. Retail leases, which are a special type of commercial lease, do have statutory restrictions imposed on the timing and method of increasing rent during the term of the lease.


5. Can a tenant assign the Lease, or sublease, without landlord's consent?

Generally, unless the Lease specifically prevents assignment or sub-leasing, the tenant has that right and doesn't require the Landlord's consent. However, most Commercial Leases will contain a term requiring the Landlord's consent to be obtained before the Lease can be assigned or sub-let, or prohibiting it entirely.


6. What is a Security Deposit?

A security deposit is typically an amount equivalent to one or two month's rent, which is deposited by the tenant to secure, as far as money can, the tenant's performance of the tenant's obligations under the Lease. Under the Retail Leases Act 1994 (NSW) a Landlord is required to lodge a security deposit with the Director-General of the Department of State and Regional Development. However, under your normal Commercial Lease, a Landlord generally is at liberty to deal with the Security Deposit as they see fit, so long as it is repaid, in part or in full, if required under the Lease.

Related Article: Why should I require security if I'm a landlord and leasing my commercial or retail premises?


7. Are there any formal requirements for the execution of a lease?

For land under the provisions of the Real Property Act 1900 (NSW) (which is most land in NSW) a Lease for a term in excess of three (3) years must be effected by executing a Lease in the approved form and the Lease must be registered, in order to pass to the Tenant an enforceable leasehold estate. If such a Lease is not registered, the Tenant would only have an equitable interest and it would be unenforceable against a competing registered interest.


8. If a commercial building gets a new owner, can the new owner renegotiate the existing lease?

No, unless the tenant is a willing negotiator.

If you purchase a commercial building with an existing lease, the term of which extends into your ownership, then you own the property subject to that lease.

As to whether the tenant will likely be a willing negotiator... this will depend on their circumstances. In short, if there is a benefit to the tenant then they will likely be a willing negotiator. For example, if there is one year left on the lease and the tenant would like to remain in the premises for a period longer than that, then there's no reason why you can't negotiate with the tenant to extend the term of the lease.

If you are a landlord in this situation you need to target those things that will result in the tenant achieving an improved position, as well as you, if you are going to achieve a favourable outcome


9. Who gets to keep the registered commercial lease?

In most situations, the registered commercial lease is duplicated and both parties receive a copy.

However, only one of these copies will have a 'registration sticker' from Land & Property Information (LPI) affixed to it. This copy is usually held by the landlord.


If you have any more questions about commercial leases in NSW, please do not hesitate to call us on 1800 994 279 or email us. A member of our Business, Commercial & Workplace team will endeavour to respond to your enquiry within 24 hours.

- Gavin Hanrahan
   Managing Partner

Gavin Hanrahan - Employment Lawyer Unfair Dismissal

 


Author: Gavin Hanrahan
About: Gavin Hanrahan is the Managing Partner of Turnbull Hill Lawyers and the Partner-in-Charge of our Business, Commercial & Workplace Team. He advises clients on a broad range of business, workplace and HR issues, ranging from employment contracts to risk management. As one of the leading business lawyers in NSW, Gavin speaks to local business owners every day and understands both the needs and difficulties of launching, managing and growing a business. Our clients appreciate his practical, personal and solutions-orientated approach and his ability to respond to legal issues that are currently impacting businesses all over NSW.
Connect via: Twitter Google+ LinkedIn

Contact Us Now

We respond in 24 hours or less

Please provide details regarding your matter so we can assist you

Enquiry Form

Fill out our enquiry form and we'll respond within 24 hours

Please tick to verify that you are not a spam

 
Publications

What happens when you burn down your house during a separation to avoid transferring it to your ex?

What happens when you burn down your property during a property settlement to avoid transferring it to your former partner? When fire fighters attended upon a property in Wollongong in the early hours of 4 August 2016 they discovered that the owner was sitting with his dog calmly watching his house going up in flames. Mr Krste Kovaces...

Read More ...

A step by step guide to obtaining a separation agreement

A step by step guide to obtaining a separation agreement from Turnbull Hill Lawyers A separation agreement (known as a binding financial agreement (or BFA) under the Family Law Act) is a legally binding document that formalises your property settlement. As a separation agreement is legally binding, each party must carefully co...

Read More ...

Significant Changes Are Proposed to Criminal Law Sentencing & Offender Supervision

On 9 May 2017, the NSW Governments announced a series of significant justice reforms that aim to deliver justice more quickly to communities and victims, strengthen sentencing options and ensure offenders are rigorously supervised when serving community orders. Sentencing Reform It has been proposed that: Suspended sentenc...

Read More ...

How does the 2017 Budget affect the family law Courts?

The government has made several announcements that will affect the family law system in the 2017 budget. These include a new initiative to help resolve disputes, additional family law consultants, and a trial of domestic violence units. The Australian Law Reform Commission has been asked to conduct a comprehensive review of the family law sys...

Read More ...

7 Hot Tips for Buying Property Off the Plan

7 Hot Tips for Buying Property Off the Plan from Turnbull Hill Lawyers 1. Lock in the right price by doing market research When you buy property 'off the plan' you are purchasing it many months, sometimes years, in advance before construction has been completed sometimes even before construction has started. For this r...

Read More ...

| 1 2 3 4 5 6 7 8 9 10 | Next


Events
Blogs
"Thank you for your work in efficiently and effectively bringing to fruition the successful sale of my Unit. It is a great relief that this is now ...

Dr G Booth

Liability limited by a scheme approved under Professional Standards Legislation

enquiries@turnbullhill.com.au