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QLD Commercial Lease - Early Termination by Tenant?

Discussion in 'Commercial Law Forum' started by Scylon, 14 January 2015.

  1. Scylon

    Scylon Active Member

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    Dear Law Answers,

    A couple of years ago, I took a deed of assignment on a commercial lease for a retail shop space. I took over an IT computer repairs and internet cafe business. The idea was of course to make a living out of it. Sadly, this has not worked out. After almost 2 years of losses, I have hit the bottom of the barrel and cannot continue to make up the difference in rent. As a result, I have started falling behind in rent. Currently, it stands about half a months' rent behind. I have already been advised by the landlord that if I do not pay the arrears within 48 hours (he just wrote a date 2 days away) "they will go legal".

    In the past, I have been able to borrow money, had a tax return, etc., to fill the coffers. For the last 8 months, I have been attempting to sub let, or get a deed of assignment on my own. I even enlisted real estate agents to assist in leasing the space. Sadly I have been unable to find a new tenant. I have contacted the landlord many times regarding my situation and diminishing capacity to meet the repayments in an attempt for leniency or assistance in finding a new tenant or even a way out of the lease. All these avenues have been rejected and I was simply told "you have to pay or we will go legal".

    There is only 9 months left on this lease and after crunching some basic numbers I have found if I closed the doors right now removing the staff member cost, surrender the security deposit and not have a business leaking money for the next 9 months the total cost of the remainder of the lease is actually less then if I left it open.

    I am starting to think I am at the point where I need property law legal advice. My question is based on the past 8 months of the landlord's refusal to accept any proposal I have attempted, and my committed attempts to find a new tenant. Do I have any legal grounds under commercial law at all? I have no idea what to do now and have no more options to keep up with the rental payments.

    Kind regards,
    Scylon
     
  2. Rod

    Rod Well-Known Member

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    Do you have documents/paper trail of your attempts to exit from the lease? Did you sign/guarantee the lease in your own name or just sign as a company?

    Did the landlord misrepresent the likely turnover or anything else in an attempt to get you to sign up?

    BTW, keep trying to sub-lease in the meantime, do not stop looking to sub-let.
     
  3. Rod

    Rod Well-Known Member

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  4. Scylon

    Scylon Active Member

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    Hi Rod,

    The lease is as myself. I am a sole trader and my brother is on the lease as they wanted 2 names. He however has 0 assets and they can't get him for anything.

    There is no clause for turn over listed in my lease.

    I have ads running even now and also the real estate agent is still on the job.
     
  5. Scylon

    Scylon Active Member

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  6. Ian Macleod

    Ian Macleod Well-Known Member

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    What state are you in (NSW QLD VIC)? When you signed the assignment did you get a disclosure statement and a copy of the lease?
     
  7. Ian Macleod

    Ian Macleod Well-Known Member

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    If you are in a retail shop (computer sales and repair) your lease probably comes under the retail leases act 1994 particularly if you are in a shopping centre or cluster of shops. If the landlord or previous tenant failed to comply with all their obligations under the act particularly in relation to assignments you might have an out.

    http://www.austlii.edu.au/au/legis/nsw/consol_act/rla1994135/

    Also pay particular attention to deceptive or misleading conduct (part 7a) when the lease was assigned ?
     
  8. Scylon

    Scylon Active Member

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    I am located in Queensland. And yes I have full documentation.
     

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