Lease Disputes
We are experienced in lease disputes whether it be residential, retail or commercial. Contact one of our lease dispute lawyers for a consultation where we can discuss your options.
Lease disputes can occur in a variety of ways and for a variety of reasons. However they occur, it is best to obtain legal advice as soon as possible to prevent the situation from escalating or becoming unmanageable. Speaking to a Lease Dispute Lawyer can help to clarify your legal position and negotiate an outcome without resorting to costly litigation in court where the process becomes more difficult to control.
There are a number of different types of leases. In New South Wales, the three main types are:
a lease under the Residential Tenancies Act 2010 (NSW) (Residential Lease)
a lease under the Retail Leases Act 1994 (NSW) (Retail Lease)
a lease for a commercial (including retail and industrial) premises that does not fall under the Retail Leases Act 1994 (NSW) (Commercial Lease)
Whilst a Retail Lease is, technically, just a type of commercial lease, we will deal with these two separately for the purpose of comparison. It is important to know which type of lease is applicable as each type of lease is different resulting in differing procedures and remedies. The main features of each type of lease is explained in greater detail below:
Retail Leases
Depending on the nature of the property, a lease for a shop will typically be a Retail Lease. The list of accepted business types is listed in Schedule 1 of the Retail Leases Act 1994 (NSW) (Retail Leases Act). A shop which is located in a shopping centre (with 5 or more shops) will almost always be considered to be a retail premises to which a Retail Lease applies, however, some exclusions do apply. For example, the Retail Leases Act will not apply if:
the lease if for a term greater than 25 years
the premises is used for for purposes which are excluded by the Retail Leases Act. Some examples include storage lockers, self-storage units or car parking.
the total lettable area of the premises is 1,000 square meters or more
the premises is used as a cinema, bowling alley or skating rink
There are many benefits to having a Retail Lease over a Commercial Lease. For example, in a Retail Lease:
the lessor is obliged to provide the lessee with a Retail Tenant’s Guide and a Disclosure Statement which, among other things, outlines the estimated outgoings attributable to the premises.
a lessee is not required to pay outgoings or contributions which were not disclosed in the Disclosure Statement.
a lessor cannot demand lease preparation expenses or accept money from a prospective lessee as an inducement to sign the lease.
the lease must be registered if it is for a term of 3 years or more. Registering a lease provides the tenant with ‘indefeasible’ possession to the premises.
once the lease comes to an end and the lessee has performed their obligations, the lessor must return the bank guarantee within 2 months.
the lessor must provide the lessee with detailed outgoings estimates and statements within set periods of time. In the event the lessor fails to do, a lessee will be entitled to withhold contributions for outgoings after following a procedure.
if the premises is damaged through no fault of the lessee, the lessee will not be liable to pay rent and outgoings commensurate with the damage the premises has sustained
there are specific provisions which deal with unconscionable conduct as well as misleading or deceptive conduct - be that by the lessee or the lessor
a lessee or lessor can lodge a retail tenancy claim through the NSW Civil & Administrative Tribunal rather than in a Court, which is generally faster and more cost effective. There are, however, a number of limitations. For example, the monetary limit on claims for leases entered into before 1 July 2017 is $400,000, whereas it is $750,000 for those entered into on or after that date.
before a lessee or lessor can take a dispute to the NSW Civil & Administrative Tribunal or to a Court, mediation must take place and a certificate of failed mediation obtained from the Office of the Small Business Commissioner.
It is crucial to obtain advice with respect to a retail leases entered into prior to 1 July 2017, as on that date the Retail Leases Act was amended but not retrospectively. This means that certain sections of the current Retail Leases Act will not apply to older leases and before making a claim it is important to ascertain which sections apply and which sections do not.
Commercial Leases
Commercial leases are usually leases made for large sites which are typically used for offices, industrial uses such as warehouses, or are retail in nature but where the Retail Leases Act does not apply. Lessees in such leases are not afforded the protections that are afforded to lessees in a Retail Lease. The policy consideration behind this is that, generally speaking, lessees who enter into such leases are usually large and established companies who can protect their own interests, unlike ‘mum and dad’ shop owners who may be up against the likes of large shopping centre owners, such as Westfield. Given there are so few protections for lessees who enter Commercial Lease, these leases tend to be much more varied and contain terms which would likely be held to be impermissible or unconscionable under a Retail Lease.
Residential Leases
Residential leases are typically those that apply to the letting of premises for the purpose of use as a residence. Residential Leases may be express or implied and may be oral or in writing, or mixture of both. A Residential Lease may even be formed despite it not granting a right of exclusive occupation or through the grant of a right to occupy together the the letting of goods or the provision of services or facilities. It also does not matter if the tenant is a corporation, so long as the premises is intended to be used as a residence by a person. Some of the requirements of a Residential Lease include:
an obligation that the landlord provide the tenant with a written residential tenancy agreement, an information statement in the approved from and a residential tenancies guide
that a holding fee cannot be more than 1 week’s rent and the tenant’s application must have been approved by the landlord before it is paid
that the rental bond cannot be more than 4 week’s rent and cannot be accepted by a landlord or their agent unless they are a registered user of the online service for rental bonds
that a tenant cannot be required to have the any carpets professionally cleaned at the expiry of the tenancy
that a tenant cannot be required to take out insurance
that a landlord cannot be exempted from liability from negligent acts or omissions by the landlord or their agent
that a condition report must be completed by the landlord or their agent at the commencement of the lease and provided to the tenant for comment
that a tenant cannot be charged for utilities, such as gas, electricity and water, unless they are separately metered. Even if water is separately metered at the premises, a tenant cannot be charged for water unless it meets certain water efficiency standards
that rent can only be increased with at least 60 days notice and that in leases that have a fixed term of more than 2 years, the rent cannot be increased more than once in any 12 month period
that a tenant can request a rent reduction of the landlord reduces or withdraws any goods, services or facilities that were originally provided
that termination of a Residential Lease must be carried out in accordance with the relevant provisions that apply. The provisions that apply will depend on whether you are within the fixed term or on a periodic agreement, meaning the fixed term has ended without either party having sent the other a termination notice in accordance with the relevant provisions
that upon the tenant vacating, a landlord cannot dispose of any of the tenant’s items (except perishable goods) left behind unless notice is given that the landlord intends to do so
Lease disputes require a lawyer familiar with the relevant legislation and the common law. Our lawyers have acted for a number of clients involved in lease disputes and have the experience and drive to help you resolve the matter. Contact the team at Pagin + Mak Lawyers for a free initial phone consultation. We are more than happy to discuss any questions you may have and explain the process in greater detail.
Disclaimer:
The information above is intended as general information only and should not be relied on. You should discuss your individual situation with a lawyer.
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