Commercial Lease in Queensland

A commercial lease is commonly referred to a retail or non-retail lease, these are non-residential leases.

The commercial lease contract between the owner of the property (the landlord) and the party renting the property (the tenant), consists of provisions consistent with relevant legislation and common law principles.

Retail leases deal directly with customers, such as stores and hairdressers.

While non-retail leases do not and generally consist of warehouses, storage, and offices.

A commercial lease is primarily governed by common law principles, allowing parties flexibility in creating contracts to suit all parties involved.

However, certain legislative provisions are in place to ensure dealings are just and fair.

When negotiating a commercial lease with a landlord as a tenant, it is recommended you research the property thoroughly to ensure there are no restrictions due to a limited disclosure obligation.

It is important both parties entering into the agreement understand the terms and conditions before signing.

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Short Term Commercial Leases

Schedule 6 of the Land Title Act 1994 (Qld) (the ‘LTA’) defines a short commercial lease as a lease for a term of three years or less, or from year to year or shorter period.

In regard to a short lease, section 106(1) of the Property Law Act 1974 (Qld) (the ‘PLA’) places a number of obligations on each party to a commercial lease agreement.

On behalf of the lessor, they have an obligation to provide and maintain the premises in a condition reasonably fit for human habitation.

The lessee on the other hand, is required to care for the premises in the manner of a reasonable tenant; and to repair damage caused by the lessee or by persons coming on the premises with the lessee’s permission.

However, structural maintenance will generally be done on behalf of the landlord.

A short commercial lease does not require to be registered to be a valid lease.

Long-Term Commercial Lease

A long-term lease may offer more stability for both lessors and lessees.

However, these leases require registration within the Titles Registry to ensure the rights of a long-term tenant are officially recorded and protected.

Terms of the Commercial Lease

The lessor and lessee as parties to the lease may negotiate its terms and conditions. This may be done in regard to the factors listed below:

The lease price and when it will fall due;
Options on sub-letting;
Protection from competing businesses;
Rights to renew or end the lease before the lease’s end date;
Rights to transfer or assign the lease; and
Options to expand.

Retail Shop Leases

The requirements for a lease to be recognised as a retail shop lease include that the business must be located within a retail shopping centre and is wholly or predominately used to carry on a retail business.

Leases under this category are governed by the Retail Shop Leases Act 1994, however this does not apply to premises such as service stations, temporary stalls, and theme park stalls.

This Act allows benefits and protection to tenants in regard to options to renew and extend leases, and early determination of current marker rent.

Important sections regarding disclosure statements, rent clauses and reviews, options and renewals, and repairs and maintenance are also included within this Act for retail shop leases.

Any further enquiries may be followed up with a legal professional.

Right to Terminate a Commercial Lease

The lease contract itself will generally include provisions surrounding both parties right to terminate the contract.

However, there are also a number of ways at common law.

A right to terminate at common law can occur in the following ways:

Breach of an essential term

(Associated Newspapers Ltd v Bancks [1951] HCA 24).

Serious breach of an intermediate term

(Hong Kong Fir Shipping Ltd v Kisen Kaisha Ltd (1962) EWCA Civ 7; Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited (2007) 233 CLR 115).

Repudiation

(Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited (2007) 233 CLR 115).

If you believe you may have a right to terminate the contractual agreement, it is advised you contact a solicitor before taking any action.

An example of this may be your tenant is behind on payments or your landlord is refusing to maintain the premises to a safe and habitable level.

A right to terminate at common law will depend on the contract itself, this should be determined by a legal professional.

Commercial Lease Disputes

Disputes regarding retail shop leases in Queensland are handled by the Queensland Civil and Administrative Tribunal (QCAT).

Disputes about commercial leases are dealt with by the Queensland Courts.

A lease is a legally binding contract which should only be agreed to once the agreement is understood, it is advised a lease should not be signed without understanding all of its terms and conditions.

If you don’t understand what you are signing, you may experience serious financial and legal problems moving forward.

It is recommended you engage a solicitor to explain the terms of the lease to you or negotiate the terms.

If you have a commercial lease dispute or issue arising from a commercial lease, please feel free to use our search engine today to find a suitable lawyer on the Sunshine Coast.