Category Archives: Leasing

Should I register my Lease?

A dilemma which often faces commercial and retail shop tenants in Queensland is whether or not they should register their Lease with the titles office.

It is common in practice for the Tenant to bear the costs of and incidental to the registration of the Lease. This can include the costs of having a Premises surveyed and plans prepared, lodgement fees and requisitions. This can all be a very costly process.

The question that often confronts a Tenant is: do the risks associated with not registering the Lease justify the initial costs of registration?

So what are the risks?

First we should look at the basic rule regarding registered and unregistered interests. Section 184(2)(a) of the Land Title Act 1994 (the ‘Act’) provides:

“the registered proprietor of a lot will not be affected by the actual or constructive notice of an unregistered interest affecting the lot.”

There are exceptions to this rule as we will see below but, disregarding the exceptions, the effect is that, if the Landlord should decide to sell the Premises at any time during the Lease, a buyer of the property is not be obliged to honour any unregistered Lease. It is worthwhile to note that this rule applies even if the buyer has actual notice of your Lease.

There are exceptions to this rule. One such exception, perhaps the most commonly occurring exception, is provided for in Section 185(1)(b) Act:

“A registered proprietor…does not obtain the benefit of Section 184…for the interest of a Lessee under a short Lease.”

A short lease is a lease for a term of three (3) years or less. Therefore, your interest under a short Lease will be protected (in part) even if it is not registered. The buyer of the Premises will be forced to honour your interest in the Premises as if your Lease were registered, but any options for a further period need not be honoured.

The Act expressly provides that, even if the initial term of the Lease is three years or less, any options to extend the lease and any rights to purchase the premises which are contained in the Lease will not receive the benefit of Section 185(1)(b).

If you want to ensure that your Lease options are protected then you must register your Lease regardless of the initial term of the Lease.

There are other, less commonly occurring, exceptions provided for in the Act, however, what is clear is that if you want to secure your tenancy for any period beyond three (3) years then registration of your Lease is essential.

If an option to purchase the leased property is included in the lease then registration is essential regardless of the term of the lease.

The process of registration requires strict compliance with the titles office requirements.

You should always obtain advice and assistance from your lawyer when entering into a commercial Lease.


Is your Queensland lease a Retail Shop Lease?

If you are a commercial tenant you probably already know that retail shop tenants have a higher level of protection than do other commercial tenants. A retail shop landlord is restrained from doing certain things.

You may be a retail shop tenant even if you do not operate a retail shop. It is essential that you are able to determine if you are entitled to the benefits of the act. A link to the Retail Shop Leases Act is set out here.

Landlords are not permitted to pass on the cost of preparing a lease to their retail shop tenant.

There are rules about the maximum proportion of outgoings that a landlord can ask a retail shop tenant to pay.

The landlord is restricted in the way that increases in rental can be imposed.

There are other benefits also. You should make sure that your lawyer is aware of all of these benefits and that your lease is checked to see that it complies with the act. If you have any doubts, please contact J J Riba & Co
It is to your benefit to know if you are a retail shop tenant. There are two ways that you may become a retail shop tenant.

1. Go to the back of the Retail Shop Lease Regulations -Your kind of retail business may be included in the list in the Regulations. Please follow the link. or
2. You may be located in a Retail Shopping Centre. We have set out below Section 8 of the Retail Shop Leases Act which shows how you determine if the premises are a Retail Shopping Centre.

If either 1 or 2 above is correct then you have the additional benefits and protections of the act.

8 Meaning of retail shopping centre
(1) A retail shopping centre is a cluster of premises having all of
the following attributes—
(a) 5 or more of the premises are used wholly or
predominantly for carrying on retail businesses;
(b) all the premises—
(i) are owned by the 1 person; or
(ii) have the 1 lessor or head lessor, or, if the premises
were leased, would have the 1 lessor or head
lessor; or
(iii) comprise lots within a single community titles
(c) all the premises are located in—
(i) 1 building; or
(ii) 2 or more buildings if—
(A) the buildings are adjoining; or
(B) if the premises are owned by the 1
person—the buildings are separated by
common areas or other areas owned by the
owner or a road; or
(C) if the premises are not owned by the 1
person—the buildings are separated by
common areas or a road;
(d) the cluster of premises is promoted, or generally
regarded, as constituting a shopping centre, shopping
mall, shopping court or shopping arcade.