Commercial & Industrial Leases Lawyer Newcastle
Property & Conveyancing
At Burgess Thomson, we specialise in providing comprehensive legal services for both landlords and tenants engaged in commercial and industrial lease agreements. Whether you are leasing property for commercial use or industrial operations, our experienced team is equipped to guide you through every step of the process.
The Importance of Legal Expertise in Commercial Leases
Complex Investment Decisions
Risk Mitigation
The potential for complications in a commercial lease can range from financial disputes to issues with lease terms and compliance with regulations. Such problems can jeopardise not only your property but also the viability of your business. Therefore, it is crucial to have seasoned legal professionals like Burgess Thomson to navigate these challenges effectively.
How We Can Help with Commercial and Industrial Leases
Tailored Legal Services
Our team offers a range of services tailored to the specific needs of commercial and industrial leasing:
- Lease Drafting and Negotiation: We draft and review lease documents to ensure they are clear, fair, and legally binding. Our goal is to negotiate terms that protect your interests while fostering a positive landlord-tenant relationship.
- Legal Advice on Lease Types: Understanding the distinction between commercial, industrial, and retail leases is crucial. We provide expert advice to determine the appropriate type of lease based on your business activities, helping you avoid common pitfalls and legal missteps.
- Compliance and Regulation Guidance: Our legal experts ensure that your lease agreements comply with all relevant laws and regulations, minimising the risk of future legal issues.
- Dispute Resolution: Should disputes arise, our team is prepared to represent your interests robustly, whether through negotiation, mediation, or court proceedings.
Strategic Support for Landlords and Tenants
We represent both landlords and tenants, which gives us a balanced perspective on the needs and priorities of each party during the leasing process. This comprehensive approach allows us to anticipate potential issues and address them proactively, ensuring a smoother transaction for all involved.
Why Choose Burgess Thomson for Your Leasing Needs?
Experienced Legal Practitioners
With years of specialised experience in commercial and industrial leases, Burgess Thomson has developed a deep expertise that is invaluable in complex lease negotiations and dispute resolution.
Client-Focused Approach
We prioritise your business objectives and work tirelessly to ensure that your lease agreements serve your long-term interests. Our team is dedicated to providing personalised service that addresses your unique business needs.
Proven Track Record
Our firm has a long-standing history of successfully managing commercial and industrial leases for a diverse clientele. Our pragmatic and informed approach has made us a trusted legal advisor in Newcastle and beyond.
Accessibility and Responsiveness
We understand that timely and effective communication is critical in legal matters. Our team is always accessible to answer your questions and provide updates throughout your leasing process.
Partner with Burgess Thomson
Choosing the right legal partner for your commercial or industrial leasing matters is crucial. At Burgess Thomson, we offer the expertise, dedication, and personalised service needed to navigate the complexities of commercial leases effectively.
Contact us or request a quote to discuss how we can assist with your commercial and industrial leasing needs and help secure the success of your business endeavours.
What is registration of a lease?
Registration of a lease refers to the process of formally recording the lease on the title of the landlord’s property and noting on title that the tenant has an interest in the property under the terms of the lease.
In NSW, registration is required for all leases with a term greater than 3 years. Any option to renew period contained in a commercial or retail lease is included in the term when determining whether registration is necessary. For example, a 2-year lease, with an option to renew for an additional 2 years, would need to be registered. This is because the maximum term of the lease is over 3 years.
A lease that is 3 years or less can be registered if both the landlord and tenant agree to do so.
For a lease that falls within the Retail Leases Act, the lessor is required to register a lease of 3 years or more within 3 months after it has been signed and returned to the lessor.
Section 53 of the Real Property Act 1900 (NSW) (the RP Act) provides that when land under the RP Act is leased for a term exceeding three years (including the initial term and any option terms), the lease must be in the ‘approved form’.
Further, s 42(1)(d) of RP Act provides that a lease with a term exceeding three years must be registered on title for the lease to pass with the land if the land is transferred/sold.
However, neither ss 53 nor 42 of the RPA mandate the registration of a lease. Section 42 merely provides that unregistered leases with a term exceeding three years do not pass with land.
Leases with a term not exceeding three years (i.e., up to and including three years—including any option(s) to renew)—are provided statutory protection and are not required to be registered, although the parties may still choose to do so.
By contrast, s 16 of the Retail Leases Act 1994 (NSW) (the Retail Act) provides that any lease that falls within the scope of the Retail Act and which has a term exceeding three years (including any option(s) to renew) must be registered. Failure to comply with the Retail Act can incur penalties.
Will my lease still be binding if it is not registered?
A properly signed and executed lease will be binding on both the landlord and tenant who signed the lease, regardless of whether or not the lease is registered on title.
Registration is not required to ‘perfect’ or otherwise complete a lease.
Why is lease registration necessary?
Registration of a lease with a term (including option periods) greater than 3 years is necessary to protect the tenant’s interest under the lease.
Generally speaking, a tenant has the most to gain from lease registration. By ensuring their lease is registered on the landlord’s property title, a tenant gains a registered interest over the title of the property, which the tenant can claim on, if necessary.
In NSW, only leases with a term of 3 years or less are provided statutory protection under the relevant land titles legislation. This means that a lease of a term greater than 3 years (including any options to renew) should be registered in order to gain statutory protection and a registered interest on the title.
If a lease is not registered, any competing interest that is registered over the title will take preference to the unregistered lease.
Risks if a lease is not registered
The most common problems that can arise for tenants with an unregistered lease for a term greater than 3 years are:
- where the landlord sells the property; and
- where the landlord has a mortgage on title.
When a landlord sells a commercial property
If a lease is registered on title and the property is sold, the new owner (who will become the new landlord) will be required to adhere to the terms of the existing lease, including being bound to provide any new lease required under an option period in the lease. They will not be able to set the lease aside or unilaterally change the terms of the existing lease.
If a lease is not registered and the property is sold, if the purchaser of the property was unaware of the lease of the premises, then they could seek to avoid recognising the lease and seek to evict the tenant even if the lease remains in term.
The purchaser cannot merely claim they were unaware of the lease or actively choose to ignore the fact the premises was tenanted. The purchaser would genuinely need to have been unaware of the tenant’s occupation. This may be somewhat unlikely, given any diligent purchaser would likely inspect a property before purchasing, but registration is a relatively inexpensive process to avoid any potential argument or risk of becoming a test case.
When there is a mortgage on title of a commercial lease property
If a bank holds a registered interest over the title, the bank or mortgagee is not obligated to recognise the tenant’s right to occupy the property unless they have consented to the lease.
The process of registering a lease includes contacting the mortgagee for consent and requesting production of the title, meaning a record of consent is obtained. Mortgagees will often pass on their costs for consenting.
Lease registration if the lease term is under 3 years
A lease with a term that is shorter than 3 years (including option periods) is automatically protected under legislation in NSW. Registration is not required to protect the tenant’s interest in the property.
A lease can still be registered even if it is shorter than 3 years if the parties wish for it to be noted on title.
Registration of a commercial lease has no detriment to a landlord
For a landlord, allowing a lease to be registered on their title is of no detriment and has little effect to their ownership of the property, given they would have already agreed to the lease.
Some may view the registration of the lease to add value to their property. For example, in the event that a landlord was attempting to sell their property as an investment, prospective buyers will want to be aware of all potential interests over the property and the entitlements they will receive upon purchasing. If applicable, the land may also be of more value if it has already been surveyed or identified using a subleasing plan or deposited plan, allowing a prospective buyer to enter into multiple leases over the premises.
What is the process for lease registration?
If a lease has been prepared and is in registrable form (ie. it complies with the Land Registry’s requirements), then the process of registration is relatively unobtrusive.
Consent will need to be obtained from:
- any mortgagee of the landlord;
- a head lessor if the lease is a sub-lease; and
- Crown lands if the lease includes an area of crown lands (for example, leases of areas within a marina).
The tenant will be responsible for costs of registration, which will include registration fees payable to Land Registry Services and PEXA. For commercial leases, the tenant may also be responsible for the lessor’s legal fees in attending to registration.
Registration can be completed in a few weeks, subject to any delays in obtaining necessary consents and the Land Registry Services approving the registration.
Conclusion
Registration of a lease can be an important final step when entering into a retail or commercial lease. Particularly for tenants of leases over 3 years, registration should be insisted upon to ensure their interest in the lease is protected and upheld.
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FAQ's
Who pays the cost of preparing a lease document?
In a typical commercial or industrial lease, the tenant will be required to pay the legal costs involved in the lease transaction. Additional disbursements involved in a lease transaction can include title search fees, registration fees, mortgagee consent and production fees.
Does a commercial lease need to be registered?
Depending upon the terms and length, commercial lease agreements are usually registered on the title of the property. This applies to commercial leases of more than 3 years (including option periods).
What is the difference between a commercial lease and an industrial lease?
A commercial lease typically pertains to properties used for business operations such as offices, shops, and service centres, while an industrial lease is related to properties used for manufacturing, warehousing, or distribution. The specific requirements and regulations for each can vary significantly, based on the nature of the business activities and zoning laws.
How long are commercial and industrial leases typically?
Can I negotiate the terms of my commercial or industrial lease?
Yes, terms of commercial and industrial leases are often negotiable. Key aspects such as rent, outgoings payable, lease duration, renewal options, rent reviews, fit-out contributions, and maintenance responsibilities can be tailored to meet the specific needs of both the landlord and the tenant. It is advisable to seek legal advice to ensure that the lease terms protect your interests.
What happens if I need to terminate my commercial or industrial lease early?
Early termination of a lease can have legal and financial consequences. Typically, the lease agreement will specify conditions under which a lease can be terminated early, which may include penalties or obligations to find a replacement tenant. Negotiating exit clauses and understanding these conditions is crucial before signing the lease.
