Retail Leasing in Queensland – Why a Tenant Needs a Lawyer

Retail Leasing in Queensland – Why a tenant needs a lawyer

When leasing a commercial premises in Queensland, there are two types of leases:

1. Commercial Lease; and
2. Retail Lease

In this article we focus on retail leases which relate to retail premises and are governed by the Retail Shop Leases Act 1994 (the Act). A retail lease usually applies when a tenant leases premises in a shopping centre or carry’s on a retail business. The Act sets mandatory minimum standards for retail leases in Queensland and a set rigid procedure that must be followed by both the landlord (lessor) and tenant (lessee).

What the Landlord must do before the tenants signs the lease

The landlord is required to provide the tenant with what is called a Lessor  Disclosure Statement . This disclosure document provides a summary of the proposed lease and all the critical details including rent, term of lease, options and outgoings. The disclosure statement is required to be provided at least 7 days before the lease is signed. If the landlord fails to provide the disclosure statement, the tenant may terminate the retail lease within a certain time frame without any repercussions or comeback by the landlord.

What the Tenant must do before signing the lease

The tenant also is required to provide a Lessee Disclosure Statement to the landlord disclosing their experience and background in business. This document must be provided no later than 7 days after receiving the landlord’s disclosure statement.

Engage a Lawyer to review and advise on the terms of the lease

Before a tenant signs the lease, it is best to have an experienced commercial property lawyer review and advise on the terms of the lease. Quite often, important terms are overlooked and not negotiated resulting in serious disputes and in worse case scenarios great financial loss. As experts in commercial retail leasing, we know what to look out for to best protect a tenant.

Some key terms to be addressed:

• Term – How long are you renting the premises for?
• Make good – what do you have to do when exiting the premises?
• Rent reviews – when and how often can the rent be reviewed
• Outgoings – the lease must disclose what outgoings are payable and how they are determined
• Permitted use – what can the premises be used for
• Options – are you entitled to renew the lease for a further term and if so, how do you go about it?
• Air conditioning – who is responsible for maintenance and repairs
• Incentives – are incentives being offered by the landlord and what is the fine print surrounding them.

What happens next?

1. We shall review the lease and provide you with a written Letter of Advice, explaining the key terms and highlighting any concerns / recommendations we may have concerning pitfalls in the lease;
2. We then confer with you with respect to our recommendations and if necessary we shall, on your behalf, negotiate with the landlord on any necessary amendments;
3. We will prepare the other necessary paperwork that accompanies the lease;
4. We will assist with the execution of the lease and handover of the premises.

If you are a tenant looking to lease a retail property contact one of our commercial lawyers on 07 3808 7777 or business@mclaughlinlawyers.com.au