New Shopping Centre Owners - Worried About One Year Commercial Lease

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Kellie

Member
28 June 2014
2
1
4
Hi, I am representing a group of Retail and Service Operators located within a large Shopping Centre. My question is should we seek legal advice on our rights as Business Owners? Our Centre was sold last year with new owners, and they are about to extend and refurbish. We are all very worried as they are only offering one year commercial lease terms and we are not forthcoming with their plans. Should we be approaching this as a group? Please help.
 

John R

Well-Known Member
14 April 2014
689
174
2,394
Sydney
Hi Kellie,
If all tenants in the group:
  1. are of a similar size (e.g. a group of non-anchor tenants);
  2. have a similar ownership structure (e.g. each business is a private company owned by shareholders, etc.);
  3. share the same concerns about the new one (1) year retail leases offered;
  4. have been offered the same lease terms; and
  5. looking to save on legal fees,
then approaching a solicitor with experience in retail leases, as a group, is a strategy that you may consider.
It is ultimately at the individual solicitor's discretion as to whether they are comfortable to represent one or all of the tenants.

From a practical perspective, responding to the new shopping centre owner as a group is a commercial decision that needs to be considered against the unique circumstances of your situation. For example:
  1. What is the supply and demand balance for tenants in the shopping centre? That is, if the group was to leave the shopping centre, how difficult would it be for the shopping centre owner to find new tenants to replace the group?
  2. What is the power/voice of the individual tenant vs the group of tenants? That is, is the shopping centre owner more likely to listen to the group?
Hope this helps. Please keep us updated with your progress.
 

Kellie

Member
28 June 2014
2
1
4
Hi Kellie,
If all tenants in the group:
  1. are of a similar size (e.g. a group of non-anchor tenants);
  2. have a similar ownership structure (e.g. each business is a private company owned by shareholders, etc.);
  3. share the same concerns about the new one (1) year retail leases offered;
  4. have been offered the same lease terms; and
  5. looking to save on legal fees,
then approaching a solicitor with experience in retail leases, as a group, is a strategy that you may consider.
It is ultimately at the individual solicitor's discretion as to whether they are comfortable to represent one or all of the tenants.

From a practical perspective, responding to the new shopping centre owner as a group is a commercial decision that needs to be considered against the unique circumstances of your situation. For example:
  1. What is the supply and demand balance for tenants in the shopping centre? That is, if the group was to leave the shopping centre, how difficult would it be for the shopping centre owner to find new tenants to replace the group?
  2. What is the power/voice of the individual tenant vs the group of tenants? That is, is the shopping centre owner more likely to listen to the group?
Hope this helps. Please keep us updated with your progress.

Hi John, Thank you for your advice. I am going to try and negotiate on my own first and then, let you know my outcomes, my aim is secure my business within the centre. Kell
 
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Rod

Lawyer
LawTap Verified
27 May 2014
7,239
978
2,894
I have had the same issue. New owner would not commit to long lease, and they don't have to regardless of how much I didn't like it. After 12 months decided to leave and moved across the road. Always assume the worst when the landlord will not issue a long lease. Look after your own interests first because you can be confident the landlord will be looking after his own.