VIC Commercial cafe lease

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Anita Louise

Well-Known Member
12 July 2017
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Hi , My husband and I own the freehold of a cafe. The tenants were due to exercise their option on another five years last September. The Lease stipulated that there would be an Independent Valuer to set the rent at this time. The tenants expressed their concerns and we agreed with them, that we would leave the rent as is, with the usual percentage increase, as in previous years. The tenants went into voluntary liquidation in June and now the liquidator owns all the equipment. My husband is under the impression that because the tenants didn't exercise their intention for another option of five years they may not have had a valid lease at the time of liquidation, meaning that the liquidators had entered the premises illegally and they don't own the equipment. I don't agree with him. I would love to know someone else's opinion.
Thanks Anita Louise
 

Rob Legat - SBPL

Lawyer
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16 February 2017
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I'm not a Victorian lawyer, so this is on general principles:
1. If there wasn't a valid exercise of option, the tenants were probably in what is called "holding over". Check the terms of your lease, there's probably a section on it.
2. Even if it is a holding over arrangement, there's still a valid tenancy.
3. Unless you were leasing them the equipment too, it has nothing to do with the lease.
4. The liquidator has the power to run their business if validly appointed. That means they step into the tenant's shoes. Once they've had a short opportunity to assess the situation, they'll usually terminate the lease and walk anyway if they're simply going to liquidate the business and there's no valid lease to assign.
 
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Anita Louise

Well-Known Member
12 July 2017
23
0
121
I'm not a Victorian lawyer, so this is on general principles:
1. If there wasn't a valid exercise of option, the tenants were probably in what is called "holding over". Check the terms of your lease, there's probably a section on it.
2. Even if it is a holding over arrangement, there's still a valid tenancy.
3. Unless you were leasing them the equipment too, it has nothing to do with the lease.
4. The liquidator has the power to run their business if validly appointed. That means they step into the tenant's shoes. Once they've had a short opportunity to assess the situation, they'll usually terminate the lease and walk anyway if they're simply going to liquidate the business and there's no valid lease to assign.