FAQs
Can you have a Lease in place but still allow the tenant to get out when they want?
Yes – A Lease can include a right for a Lessee to terminate upon specific terms and conditions.
Can the landlord or tenant have the lease in a business name or a fund name?
No – Because a Lease is “an interest in land”. The only entities capable of having such an interest are a) an individual or individuals or b) a Pty Ltd Company. The business name or fund name can be mentioned in the Lessor and Lessee panels but must be in (brackets).
If the Lessee assigns the Lease, what residual obligations remain with the original tenant?
If the original tenant (transferor) prepares and serves an Assignor’s Disclosure Statement on the incoming tenant (transferee) then the transferor’s maximum liability is two years from the date of the assignment or the date of the expiry of the Lease or the date that the Lease is extended, whichever comes first. If they don’t serve the Assignor’s Disclosure Statement they remain ultimately liable if the transferee defaults until the very end of the Lease.
The above also applies to the liability of a guarantor.
What is the difference between a Sublease and an Underlease?
Subletting is a generally used term to describe the arrangement whereas an Underlease is the name for the legal documents that put that arrangement in place and on a firm legal footing.
My tenant doesn't have any assets but has a friend that owns property and who is willing to go Guarantor. Is this possible?
Yes – A Guarantor does not have to be a Director of the tenant company and they can be completely unrelated to the Lessee.
I am negotiating with a tenant to build a shed on some land that I have but before I go ahead I would like to tie in the tenant. How can we do this?
We can prepare a Lease over the land which contains a provision making the Lease subject to the completion of the shed. The commencement date can be set at the estimate completion date and the rent can start once the tenant has possession.
The main issue with this situation is whether there is enough detail such as plans and specifications to ensure that both parties expectations are the same, as it often happens that disputes arise when the Landlord thinks it’s finished and the tenant should start paying rent but the tenant feels that there is more left to complete.
I own a strata titled office which i rent out. Do I need to have public risk insurance?
You need to find out if the Strata Corporation policy will cover you if a part of your office was responsible for the accident. It may be that the Strata Corporation policy only covers the common area and not your office. In any event you should check with your insurance company as well as the Strata Corporation to ensure you are covered.
Are there any Covid rules still in place?
As at 1 September 2021, there are no current rules that oblige a Landlord to Suspend or Defer Rent in South Australia.
Can a Tenant get out of a Lease if they weren’t given a Disclosure Statement ?
Assuming the Retail and Commercial Leases Act applies in the circumstances, the Tenant may be able to cancel the Lease. However, the Magistrates Court will look at a number of factors including how long the Tenant has been in the property and whether they were disadvantaged by not receiving a Disclosure Statement.
What is the situation if the Landlord gave the Lease to the Tenant but they never signed it?
Even though the parties may not have formally signed the Lease, where they have partly performed their obligations, the common law doctrine of part performance may be relevant and may act to create a contract in equity on the terms set out in the unsigned Lease. Assuming the Retail and Commercial Leases Act applies to the property, the Tenant may have rights to a five year term if they have been in occupation and paying the Rent for at least six months. The Landlord may also be able to enforce the five year term created by the Act. It would be wise, if you are in this situation, to seek legal advice.
Should I have to charge my tenant GST on the amount of outgoings that they pay each month?
You are required by the ATO, assuming you are registered for GST, to send them 1/11 of the amount you charge your tenant for outgoings so you should definitely charge your tenant GST on top of the outgoings.
What happens if the tenant stays in the property once the lease has expired?
Generally it becomes a monthly “tenancy at will” and either party can give one months notice to end it.
Do I get a rent increase if the Lease expires but the tenant stays in the property?
Our leases provide for a 10% increase if the tenant stays as a monthly tenant.
Who pays for graffiti removal?
Under our leases, the tenant does.
The tenant has asked that the lease be registered. Should I agree and why?
Registration of a lease means that it will be noted on the title to the land and therefore a future purchaser will have to abide by the terms of the lease. Generally registration is of most benefit to a tenant and as it is not generally to the landlord’s detriment you should probably allow it. It would pay to discuss it with The Lease Bureau first, however as there may be costs involved for the Landlord as well as the Tenant.
How much bond can I ask for with a commercial lease.
The equivalent of 4 weeks rent (not one calendar month but 4 weeks)
How do I ensure that some changes that the tenant and I have agreed upon are binding.
The best way is to have The Lease Bureau prepare an extension of lease document and include the variations in it. Once this is signed by all parties the new arrangement will be binding.
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Not sure about certain aspects of your commercial lease? Our FAQ section addresses common concerns, but if you can’t find what you’re looking for, we’re here to help. Contact us for clear, practical advice tailored to your situation.
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