As retail and commercial leasing lawyers, Mepstead lawyers has decades of experience in protecting your interests.

We can assist you in:

• Retail leases ensuring conformance with legislation
• Disclosure Statements
• Commercial Leases
• Industrial Lease
• Sub-Leases
• Assignment of Leases
• Renewal of Leases
• Residential Tenancies

What is a Lease?

A lease is an Agreement between the owner of a property (known as the Landlord or the Lessor) and the occupier of the premises (known as the Tenant or Lessee). The Lease sets out the terms of the agreement and the rights and obligations of each party. The Tenant or Lessee’s occupancy of the premises is usually for the purpose of carrying on a business or conducting a commercial venture.

What should be included in a Lease?

Essential terms, such as:

• The Parties
• Rent
• Premises
• Terms

There are a number of additional terms and provisions that should be clearly stated in a Lease. These can include the outgoings, the bond payable by the Tenant, the method and frequency of rental payments, the rights of each party and the obligations of each party.

What are Outgoings?

Outgoings are costs incurred by the Landlord relating to the maintenance and management of the premises and are often passed to the Tenant under the terms of the Lease. Outgoings can include rates, body corporate fees, cleaning and maintenance and repairs but not Land Tax.

What is a Guarantor?

A Guarantor is an individual who guarantees the performance of the Tenant (where the tenant is a company) under the Lease. The Guarantor is required to meet the obligations of the Tenant if the Tenant is in default of the Lease.

What is a security bond?

A security bond is usually payable by the Tenant prior to the commencement of a Lease. The security bond is protection for the Landlord if the Tenant defaults on their obligations under the Lease (I.e. fails to pay the rent). The security bond can often be paid as a cash bond or a bank guarantee and can be in an amount equal to between 1 month and 12 month’s rent.

What is a Bank Guarantee?

A bank guarantee is a document provided by the Tenant’s bank as an assurance that the amount of the bank guarantee will be paid to the Landlord if the Tenant defaults on their obligations under the Lease. In some instances a bank guarantee can be accepted in lieu of a cash bond.

What is an Assignment of Lease?

An Assignment of Lease is the process where the original tenant (the “assignor”) assigns their right to the leased premise to someone else (the “assignee”). An Assignment of Lease commonly occurs when the tenant sells their business. In this case, the Seller of the business would assign their rights to the leased premise to the Buyer of the Business.
This is always subject to the Landlord’s consent which may not be unreasonably withheld.

How do I know if my lease is a Retail Lease or Commercial Lease?

There are different definitions of what constitutes a retail shop versus a commercial property. However, if the following apply, the lease will likely be considered a Retail Shop Lease:

• It is a type of business described as a ‘Retail Shop’ under the legislation for the state in which the business is conducted; or
• The business is conducted in a retail shopping centre; or
• Premises which is used wholly or predominately for the carrying on of a retail business.

It is important to seek legal advice as to whether or not the premises you are leasing falls under retail shop legislation.

What is the difference between a Retail Lease and a Commercial Lease?

There are a number of key differences which separate a retail lease from a commercial lease.

Legislation

Retail Leases are governed by state specific retail legislation. In Queensland, retail leases are governed by the Retail Leases Act 2003 (Vic). This is in contrast to a commercial lease which is not required to conform to any legislation. Retail Leases require both the landlord and the tenant to have an understanding of their rights and obligations under legislation.

Disclosure and Advice Documentation

One of the key differences between a Retail Lease and a Commercial Lease is that the former requires a number of documents to be submitted between the parties prior to the commencement date of the Lease. The Landlord must provide the tenant with a ‘Lessor’s Disclosure Statement’ s

What is an option?

An option is a further period after the initial term of the lease whereby a tenant can “as of right” elect to extend the lease for the option period, provided they have strictly conformed to the terms of the lease.

I am a tenant and want to exercise my option for a further period, how do I do this?

You must read the terms of the lease and exercise the option in accordance with the lease. This usually requires the tenant to serve a formal notice on the landlord at some time before the expiry of the current lease. Be aware – as the option may need to be exercised a number of months before the expiry of the lease. An incorrect or out of time option notice can result in the tenant not receiving the benefit of the option and being required to vacate the premises. It is important to obtain legal advice before you attempt to exercise an option to make sure it prepared correctly and served strictly in accordance with the terms of the lease.

How can I terminate my lease?

There are usually clauses in Leases relevant to termination. These clauses may include an early termination clause, mutual agreement clause, long term expiry clause or termination for breach of clause. Whether or not you can terminate your lease agreement depends entirely on the terms of the agreement. Making or terminating a lease can be a complicated legal matter. Please contact us for our professional assistance with your leasing matter.

Contact information

Call Us:
(03) 5941 5166
Email us:
reception@andrewslegalgroup.com.au