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VIC Commercial Lease Agreement - Can Owner Lock Me Out?

Discussion in 'Commercial Law Forum' started by anon27, 5 January 2015.

  1. anon27

    anon27 Member

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    Good Morning,
    I have a Commercial Lease agreement on a factory. My business has not been going well and I am now just under 3 months in arrears in my rent. The factory is rented through the owner. On 24.12.2014, the owner changed the locks on the premises without warning. My truck is locked in the factory and I am unable to work now. I'm wondering if there are any tenants rights that I have.

    My questions are:
    Is the Owner allowed under commercial law to lock me out and not let me release my property so I can go to work?

    What advice can you give regarding gaining access to my property?

    Am I able to charge a fee for every day my property is not released as my right to trade has been stopped by the Owner of the factory?

    I am trying to obtain funds to pay the rental arrears, but this takes time.
     
  2. Tracy B

    Tracy B Well-Known Member

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    Hi Stuart,

    The owner has changed the locks because your rent has fallen three months into arrears. The question is:

    1. Have you contacted the owner and explained your financial situation (i.e. warned them that you are having trouble paying rent on time) and arranged to some financial agreement where you continue to possess the factory premises and ultimately pay the due and current rent?

    2. If not, what does your rental agreement say about late payment? Does it have a clause that allows the owner to repossess the premises or prevent your possession of the premises due to late payment? Further, does it have a clause requiring the owner to give the tenant notice of late payment and demand of payment or can the owner automatically exercise these powers after a certain period of non-payment? The first place to look is always your rental agreement.
     
  3. Sophea

    Sophea Well-Known Member

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    Hi Stuart, further to Tracy's comments above, your rights will really depend on what is in your lease, however lessees sometimes also have additional statutory rights. Section 146 of the Property Law Act prevents landlords from re-entering a property (i.e. changing the locks) unless they have first served on the lessee what is commonly referred to as a Notice to Remedy Breach.

    This notice specifies the particular breach relied upon (i.e. rental arrears), and how that breach may be remedied within the designated period of time. If you do not remedy the breach within the stated time, then the landlord can terminate the lease and re-claim the property.

    I would seek legal advice about this because unless you have received such a notice - and these notices must be filled out correctly and to the letter otherwise they will be held to be invalid - it sounds as though the landlord does not have grounds to do what he has done.
     

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