You are a firm but fair landlord. Your tenants dislike you but they would wouldn’t they. You enjoy being in charge and appreciate the support given to you by the Courts which give tenant’s complaints that leases are “unreasonable, mean and petty” short shrift.
You decide to venture into retail shop leases. But the government has made “changes”. What sort of changes? Well roughly there are ten:
They haven’t reduced the money that you can charge in rent-they know that your blood pressure would not take that sort of thing.
- You pay your own lawyers fees. Hey, don’t shoot the messenger here.
- In that modern “open kimono” sort of way everybody discloses everything to everyone. Everybody-you, the lessee, and the assignee must issue Disclosure Statements to each other. This has to be done on special forms containing particular things. It doesn’t matter that much if the lessee and assignee don’t do this but if you don’t there is hell to pay. If you do not issue a disclosure statement 7 days before they enter a lease or your disclosure statement is defective then it allows the lessee to terminate the lease for 6 months. This does not apply if you acted reasonably and honestly but as a landlord unless you get lucky and your mother is the judge no one is going to believe you.
- You see it as a tradition that the tenant renews the option and then you hit them with the exorbitant rent and all hell breaks lose. Retailers get early notice of what you say is the current market rent. Until you tell them they can still exercise the option and have 21 further days after you tell them to make their mind up.
- If you cannot agree a market rent then there is a dispute clause which sets out a fair way of it being determined.
- You must give the tenant 2 months notice that the option is to be renewed or you can be fined. It does not mean that the tenant can extend.
- Six months before the end of the lease you must give notice if you intend to grant another lease. Or the tenant gets a six months extension.
- A tenant who assigns is no longer responsible for any bad behaviour of assignees. However, the guarantors are.
- If you have a relocation clause in the lease which says that the tenant gets 3 months notice. The tenant gets the option of terminating the lease if a notice is served. The lease at the relocated premises must be on the same terms. The lessor pays the costs.
- Demolition clauses you must give 6 months if you do not demolish after all you must pay compensation to the tenant for the disruption.
- Leases must be over 6 months.
The suffering is not all one way. You know how much tenants hate spending money on lawyers? Well the government makes the tenant go to a lawyer to get a legal advice certificate.
Why would the Queensland Government do this to you? Well you may recall a Chinese proverb which says “A man without a smile should not open a shop”. Of course, that is in China not Queensland. Some Queensland retailers seem very unhappy indeed. In that way that some teachers hate kids. Take a trip to a few shops and enquire “How’s business” and you will appreciate that they have enough on their plate and that is why the government has had to act to cheer them up as it was ruining the tourist industry.
Has it worked? Well as Chinese Premier Zhou En Lai said in the 1960s when he was asked the impact of the French Revolution, "It’s too early to tell".
I hope this helps.
Paul Brennan is a property and commercial lawyer practising on the Sunshine Coast. To contact him call 07 5438 8199 or email email@example.com or go to the website of Brennans solicitors for more information.
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