When it comes to retail or commercial Leases, it is not unusual for a landlord to take forever to register a Lease and return the signed (executed) original to the tenant. What are the landlord’s obligations, what can be done about the delay and why is it important?
Once a retail or commercial Lease is signed by the tenant, it is then forwarded to the landlord’s solicitor. Under all retail Leases, which are governed by the Retail Leases Act 1994 (NSW), and most commercial Leases there are clauses which require the landlord to register any Lease for more than 3 years (including any option for renewal) and to return the executed Lease within 3 months after it is given to the landlord or its solicitor.
If the registered and/or executed Lease is not returned to the tenant within time, then a warning letter should be sent to the landlord’s solicitor giving the landlord a short period to comply, failing which legal action can be commenced to force the landlord to comply with its obligations.
It is important for a tenant to have a Lease executed by the landlord but even more important for the Lease longer than 3 years to be registered as required by the Real Property Act 1900 (NSW). Failure to do so means that a purchaser of the leased property is not subject to the Lease and can ignore it. The Act, however, protects unregistered Leases for less than 3 years.
Any business owner with a Lease for more than 3 years should check that its Lease has actually been registered in order to fully protects its interests.
July 2022