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When starting a new business one of the most important steps is securing a commercial or retail space. In doing so, it is almost always necessary to secure a lease that will be long enough to allow the business owner to become established in the community and to allow for patrons to rely on the location for repeat services and/or purchases.
Initially, it is important to determine the type of lease you need to enter into. There are two specific types for businesses, commercial leases and within commercial leases, retail leases. If your business is predominantly for selling, hiring or providing good and services to the public, then you most likely need a retail lease.  
Premises that do not fall within a retail lease include those that engage in wholesaling, manufacturing or storage. A commercial lease is one in which the focus of the business is more of a catch-all; meaning it is predominately a non-residential lease.
A commercial lease does not require disclosure of the following as does a retail lease;

Rent
Rent review
Outgoings
Any other costs associated with the lease
Tenancy Mix
Important key provisions such as those relating to the likelihood of relocation or demolition of the premises

In the event that your landlord sells the building in which you have a leased business, the transaction will be covered under the Landlord and Tenant Act 1954. The simplest answer is that nothing will happen to your lease.
The new owner will be required to honour your lease until the end of its term. Furthermore, if you entered into you lease subsequent to 1996, and the landlord sells the building the landlord with which you have your agreement will remain liable for your lease unless;

they negotiate a release from liability with you;
there is a provision in the lease which excludes liability following a sale of their interest; or
you agree to a release under the statutory procedure for release set out in the Landlord and Tenant (Covenants) Act 1995.

However, there are some other factors that also must be considered. The Torrens title system can also have an impact on your lease upon the sale of the building in which your business is housed. If your lease is registered, you may have acquired an indefeasibility of title, meaning that you have protection if the building is sold because the new landlord will have notice of the existence of your lease. However, if your lease is not registered, the new landlord may not have to honour your lease unless you have a short term commercial or retail lease for 3 years or less. Leases of this duration are automatically protected. In New South Wales the requirements for a retail lease also include:
“If a retail lease is for a term of more than three years, or if the parties to the lease have agreed that the lease is to be registered, the landlord must lodge the lease for registration within three months after the lease is returned to the landlord following its execution by the tenant.”
In the event that your building is sold, the landlord is required to give you notice of the same. This is called a Notice of Attornment. The notice must contain the following;

Name of the new owner
The address for rent remittance
Acknowledgement of any rent that has been paid in advance
Outstanding or late rent fees will be paid to the new owner
Possible need to provide a new bank guarantee to the new owner (if you provided a bank guarantee to the previous owner)

Because the sale of a building that houses business tenants is complicated, it is imperative that as a business owner, as soon as you have notice of the sale of the building where your business is housed, you seek, at the very least, a legal consultation. Upon doing so, bring a copy of your current lease agreement and any confirmation that your lease is registered. In addition, if possible, bring the name of the new buyer and a copy of the real estate sales contract entered into between the seller and the buyer.
If you find yourself in need of assistance with this or any other legal issue, please contact the law offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.
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Landlords must protect their legal and commercial interests in property. The best way to do this from a contractual perspective is to include any particularly important special provision (i.e., a “special consideration”) in the lease. If you don’t ask for it, you won’t get it.
What these special considerations should be will depend on the property, the market within which the tenancy takes place, and the particular tenant.
You should also be prepared for your commercial tenant to ask for special considerations. This is a two-way street. Commercial leases are often subject to far more negotiation than residential leases, so you and your attorney should consider in advance what kind of special requests from a prospective tenant might be acceptable.
Examples of special conditions in commercial leases
Some of the special conditions commonly found in commercial leases include:

Make good provisions. If the tenant makes physical changes to the space – adding counters, painting it purple – landlords frequently require that the space is restored to its original condition (usually at the tenant’s expense) at the end of the tenancy.
Outgoings. These may include utilities, council rates, taxes and other building costs. It is advisable to specify who is to be responsible for each.
Air conditioning. Tenants are often responsible for this cost, however, it is important to be explicit.
Conditional provisions. These might include council approval or the granting of a liquor license.  If these conditions are essential to the tenant’s success, the landlord may want to retain the right to cancel the lease if the conditions fail.
Warranties. Landlords should consider the need to protect themselves from conditions beyond their control. An example often given is internet service. Landlords should ensure that they will not be held responsible for the existence or quality of internet service or changes in law or any other factor important to the tenant but out a landlord’s control.
Early termination. A landlord may want to preserve the right to end the lease early for a variety of reasons, including adverse experience with a tenant or the sale of a property.

What the tenant may ask for

The flip side of “make good” requirements are special agreements for “fitting out.” A tenant may ask that the landlord shoulder some of the cost of making a space suitable for a particular use. Depending on the attractiveness of a particular tenant or long-range plans for the property, this might be economically worthwhile.
A longer term, an option to renew, or even a right of first refusal should the property be sold. As a rule of thumb, tenants look for a longer term and greater stability with less frequent potential for rent increases. Landlords generally look for a shorter term, but there can be sensible reasons to vary this.
Exclusivity of trade. A tenant may want to ensure that no other tenant in a shopping centre would be in direct competition and may consequently ask for exclusivity of trade clause.
Anchor tenants. Conversely, a tenant may want to ensure that the lease can be broken or re-negotiated if the mix of tenants in the centre makes a particular space less desirable because of loss of foot traffic or a change in clientele. A fine French restaurant may not do as well when surrounded by auto parts stores than it had when the neighbours were upscale retailers.
Security bond. Tenants typically post a security bond, to be held in an interest-bearing account at the beginning of a lease. Tenants will likely prefer a smaller bond, landlords a larger one.
Assignment and subleasing. Should the tenant be permitted to do either? As with many other provisions, it is best to be explicit.

As the landlord, including special conditions in your lease, can do three important things:  protect your property during the term of the lease, tailor it to the market within which the transaction takes place and perhaps even make it more attractive to a desirable tenant.
If you are considering leasing property to a commercial tenant, the attorneys at Owen Hodge Lawyers would be happy to help you draft a lease that will protect your interest. We can also help you look ahead to anticipate the special considerations for which a prospective tenant may ask. Please call us to schedule a consultation at 1800 770 780.
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Most lawyers, myself included do not want to go anywhere near the New South Wales Civil & Administrative Tribunal (NCAT). It is sometimes termed a ‘kangaroo court’. It is not a court but a tribunal set up under the 2013 Act. For a hearing, there is a president who is often a lawyer and a medical type person and a community member.
The major obstacle as to real justice is that the Tribunal is not bound by the rules of evidence. Secondly and especially in preliminary proceedings, your client may not be granted full legal representation. This can cost them their rights and perhaps ultimately the decision.
In 2018 two of my clients lost cases. The decisions of the tribunal were inexplicable.

In the first case, the daughter had looked after her mother for some 20 years. She was a loving and exceptional carer. But in a fairly opinionated family dispute of 3 against 1, the majority wanted Mum put into a residential care facility because of advancing dementia. Mum was totally opposed to this.
My client tried to adduce sound medical and caring evidence from Dementia Australia that the best place for this elderly lady to reside was her home of some 50 years. She would be well aware of her surroundings: where the bathroom and toilet were, her bed, pots and pans, the front steps. The Tribunal found against Dementia Australia and my client. The sadness to mother and daughter was excruciatingly painful.

In a similar case, a son had a quality bed sitter attached to his home. Grandchildren also resided in the son’s home. The daughter had put Dad into a residential care facility.
Again the father was not keen to stay in the facility which was about an hour from his daughter’s home. Even though good evidence was brought to the Tribunal that the daughter had taken substantial amounts of the father’s money she was supported to remain as Attorney with control of his remaining funds and guardian as to lifestyle decisions.
What can we advise?
Ensure that you and your parents and children have put in place documents prepared by an experienced Estate Planning Lawyer. That ‘experience’ may cost a few dollars more but will be worth it in the long run. Advised documents include:

     Enduring Powers of Attorney
     Advance Health Care Directives for the over 55’s or facing medical care
     Appointment of Enduring Guardianship, and
     A Will appropriate to your wealth and wealth structures (trusts, SMSF etc.).

Arrange to see Dr Lindsay Stoddart (9549 0747 or [email protected] ) or Chris Singh (9549 0704 [email protected] ) for a free 30-minute preliminary consultation.

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