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Bank Guarantees for Retail and Commercial Leases

Posted by on May 16, 2017 in Articles, Commercial Agreement & Dispute Articles, Lease Articles, Litigation Articles |

A landlord of a retail or commercial property often requires a tenant to provide a bank guarantee as security in case the tenant defaults under the Lease. Many bank guarantees that are offered to landlords are inadequately prepared by the bank and do not offer effective protection. To avoid a bank guarantee being rejected by a landlord or to ensure that it is one capable of being called on by a landlord the following should be considered: 1. Australian Bank The bank guarantee should be issued by an Australian bank with an Australian trading licence. This aids in the landlord’s ability to quickly and efficiently make a claim and to receive funds. 2. Unconditional It should provide and unconditional undertaking by the bank to pay a certain amount if a demand is made by the landlord. 3. Favouree It should correctly describe the landlord as “the favouree” i.e. the one to receive the benefit of the bank’s undertaking. 4. Customer It should state precisely the party for whom it is being issued (“the customer”) as the tenant. If the bank guarantee is sought by a third party connected to the tenant then it should mention the customer’s name followed by “at the request of [name of the tenant]”. 5. Description of Leased Premises The leased premises should be correctly described in full. 6. Purpose It must set out that the purpose of the bank guarantee is to secure the tenant’s obligations under the Lease with descriptions of the address of the leased premises and the parties including their names. 7. Amount It should correctly state the amount of the bank guarantee as required by the Lease which would normally comprise a certain number of months’ rent and proportionate share of any outgoings plus GST. 8. Expiry Date The expiry date of the bank guarantee should be at least 3 months after the expiry date of the Lease to give the landlord enough time to determine, upon the tenant vacating the premises, whether there have been any breaches of the Lease such as failure to make good the premises, to obtain any quotes for repairs, for the work to be carried out, for final invoices to be received and for a written claim to be made on the bank. May...

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Resolving Home Building Disputes

Posted by on Feb 2, 2016 in Articles, Building Dispute Articles, Conveyancing Articles, Litigation Articles |

When you are building or renovating your home and a dispute arises between you and your builder then you should take the following steps: 1. Speak to the builder and try to come to a resolution through open and positive communication; 2. If that fails then check your building contract to see if there is a dispute resolution clause that requires certain procedures to be followed. For example, clause 27 of the NSW Fair Trading Home Building Contract for work over $20,000.00 requires one party to give the other prompt written notice of the dispute. However, it then provides that, if the dispute is not resolved informally, the parties “may” confer with a mediator or expert to assist; 3. If the dispute remains unresolved then, provided there are no other mandatory procedures to be followed under the building contract, you can contact NSW Fair Trading to assist with regard to major defects within the 6 year statutory warranty period and minor defects within the 2 year statutory warranty period; 4. NSW Fair Trading will attempt to negotiate a satisfactory outcome between the builder and yourself. If that fails then a Fair Trading Building Inspector will be sent on-site to inspect the work in dispute. If appropriate, he will issue a Rectification Order which will set a date by which work is to be rectified or completed; and 5. If you are not satisfied with the Rectification Order or if it is not complied with then you may lodge a claim with the NSW Civil and Administrative Tribunal (“NCAT”) which can hear matters up to the value of $500,000.00. For matters over this figure you would have to make a claim with a Court. February...

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