"Why do I need a written lease?"
The decision of the Tribunal in Deus Software Pty Ltd v Acumen
Auditors Pty Ltd (Building and Property) [2015] VCAT 1667 shows the difficulties if you, as the landlord, have no written lease. In that case, an accountant offered to lease the premises from the landlord. There was an exchange of e-mails, but no formal written lease. Consequently, no right of re-entry was reserved. The accountant defaulted in the payment of rent and outgoings. The landlord changed the locks. The landlord refused to allow the accountant to
collect his goods in premises after re-entry unless the arrears had been paid. The Tribunal found that the landlord had no right to do so.
In addition, if your premises are "retail premises", section 16 of the Act makes it a criminal offence not to provide the tenant with a written lease.
"What will it cost me?"
We usually provide commercial leases, renewals of commercial leases and transfers of commercial leases free of charge to landlords. We also deal with transfers of retail leases free of charge to landlords. Our charges are recovered from the tenant. Unfortunately, we cannot provide retail leases and renewals of retail leases free for landlords because of the very extensive extra documentation which we must prepare for landlords to give to tenants of retail premises. As retail leases vary enormously, with the Act imposing different requirements on landlords of different types of retail leases, we will provide you with a written quote for your particular type of retail lease.
Disclosure Statement
If your premises are "retail premises", you are obliged to give the tenant a Disclosure Statement and information brochure. If these documents are not provided to a tenant at the time when you enter into negotiations for the lease and preparation of the lease documents, then the tenant can:
1. withdraw from the lease prior to entering into occupation of the premises; or
2. within 28 days of the commencement of the lease.
The tenant is also entitled to a refund of the rental and other monies paid from the time when the tenant requested the Disclosure Statement and when it is ultimately provided.
What is a "retail lease"?
The Retail Leases Act 2003 applies to any premises from which goods or services are supplied to the general public. The Act requires that this be the sole or predominant use of the premises and provides that the Act does not apply to any part used for residential purposes. The Court of Appeal’s decision in IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd [2017] VSCA 178 has held that “the ultimate consumer test” is the test in determining whether premises are “retail premises” and therefore governed by the Retail Leases Act 2003.