(03) 9720 2922

Jansen Walsh & Grace

REMINDER: Rent reductions under the Retail Leases Act end on Wednesday 28 April.  They will revert to normal on that day.

How we can help you
We provide written advice on your new lease.  This is important for two reasons.

First, the rent reductions which were previously given to tenants do not apply to you.  We have advised new tenants how to get the best deal, and they have been successful.

Secondly, the usual form of lease used by most property managers and landlords contains a nasty clause hidden away in dense text in tiny print.  If you do not know about this clause — as most tenants do not — you will end up paying three months' extra rent to the landlord after your lease has expired.  Property managers insist upon enforcing that clause against the tenant, even though the lease has come to an end.

  

What is a "retail lease"?

The Retail Leases Act applies to any premises from which goods or services are supplied to the general public.  The 2003 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.

GST

GST is payable in addition to the rent and the landlord should give a tax invoice to the tenant.  It is not necessary for the landlord to give tax invoices monthly as they can cover, for instance, a year of monthly payments.

Outgoings
You pay the outgoings which are specified in the lease in addition to the rent, with one exception if it is a retail lease: land tax.

Security deposit or bank guarantee
You must provide either a bank guarantee or cash for the bond.  This must be invested on your behalf.  You must insist that it be invested by the landlord's lawyer or managing agent.  Time and again we have seen tenants lose their security deposit because the landlord or the director of the landlord has taken the security deposit and mixed it with the landlord's own money.  Don't pay the security deposit directly to the landlord unless you are prepared to risk losing it.

Transfer of lease and subletting
The lease allows you to transfer or sublet with the landlord’s consent, which cannot be unreasonably withheld.  Provided that the new lessee is clearly able to perform the lease and meet their obligations the landlord cannot refuse the assignment or subletting.

Signage
All signage requires the landlord’s consent and if this is a sensitive issue it should be set out in the lease.

Insurance
You have to take out insurance for $20 million to cover the risks.

Repairs and maintenance
Repairs and maintenance are your responsibility.  However, any work that may be required of a structural nature is the landlord’s responsibility.  The landlord has an obligation to maintain the property in the condition it was at the commencement of the term.

Car parking
Car parking is often an issue and should be dealt with before commencement of the lease.

Your use of the premises
It is your responsibility to ensure that your use complies with the municipal council’s requirements.  However if there are any doubts whether the use is permissible, we can advise you.

Default
Default by you has two potential outcomes.  If the default relates to significant issues, such as payment of rent or the use to which the premises are put, then default entitles the landlord to take back possession of the premises, relet them, and recover the loss from you.  If the default were of a minor nature, then you would get relief from forfeiture leaving the landlord with a right to recover damages.

Possession
It is the usual practice not to give you possession until after all documentation is signed and exchanged and the initial rent bond and costs paid.

Registration
Unlike other States, leases for terms in excess of 3 years do not have to registered.  It is voluntary.  Leases for 3 years or less cannot be registered.