LawAnswers.com.au - Australia's #1 Legal Community

LawAnswers.com.au is a community of 10,000+ Australians, just like you, helping each other.
Ask a question, respond to a question and better understand the law today!
Join us, it only takes a minute:

Notice Period for Expired Commercial Lease?

Discussion in 'Commercial Law Forum' started by Kirsten Smith, 16 July 2014.

  1. Kirsten Smith

    Kirsten Smith Active Member

    Joined:
    16 July 2014
    Messages:
    5
    Likes Received:
    0
    Hi, I am currently renting a property for our business and the original commercial lease ended on the 30/03/2012, but it did have an additional 3 year option. I have been chasing the Lessor for a new lease and has finally given me one backdated from the 01/07/2013 - 30/06/2016. I have not signed this lease. My question is I have found a new property with cheaper commercial rent and I am wanting to move. What amount of notice am I required to give to the Lessor. There is nothing written in the old lease/sub lease about the notice period.

    Thankyou
     
  2. AnnaLJ

    AnnaLJ Well-Known Member

    Joined:
    16 July 2014
    Messages:
    94
    Likes Received:
    17
    Hi Kirsten

    I have a few questions for you before I can give my opinion on your situation.

    Firstly, did you ever formally exercise the option? By formally, I mean in writing and during the stipulated period (which will be disclosed in your lease) within which you are able to exercise the option? If you did not formally exercise the option, did you express your intention to stay in the premises or extend the lease term in any other way to the Lessor?

    Secondly, is your business considered a 'retail' business by any chance? (I am asking this to determine whether retail leasing legislation applies).

    There's a chance you may be on a monthly holdover on your lease and able to give one month's notice to vacate, but this will very much depend on the answers to the questions above.

    Thanks,

    Anna
     
  3. Kirsten Smith

    Kirsten Smith Active Member

    Joined:
    16 July 2014
    Messages:
    5
    Likes Received:
    0
    Hi Anna,

    No we did not formally exercise the option but informed the landlord on our intent to stay we are on a sub lease . We manufacture glass windows and doors, shower screens etc. But we also have a showroom for customers and sell parts to customers for there windows and doors, so yes to answer your questions we do retail to the general public.
     
  4. AnnaLJ

    AnnaLJ Well-Known Member

    Joined:
    16 July 2014
    Messages:
    94
    Likes Received:
    17
    Hi Kirsten

    When you informed the landlord you would be staying, did you advise you would be staying for the term of the option period? or was there no discussion about how long you would be saying?

    The reason I ask this is because, depending on the communications, there may be a deemed exercise of that option which would mean your lease would continue to run until the end of the option period. It's very much dependent on what the communication was.

    Do you mind me asking what state you are based in?
     
  5. Kirsten Smith

    Kirsten Smith Active Member

    Joined:
    16 July 2014
    Messages:
    5
    Likes Received:
    0
    No there was no communication in regards to exercise the option it was only noticed about 6 months later that the lease had expired. She couldn't have offered me another lease because her lease with the owner only expired last year. I assumed it was a month to month basis and she said don't worry about it. I am in Queensland.

    The original lease was from 01/09/2010 - 30/03/2012 with additional 3 year option. But the time frame for her lease to expire was last year so I don't understand how she could have given me the option to renew when she did not have a lease in place that long herself.

    Sorry I hope this makes sense.
     
  6. AnnaLJ

    AnnaLJ Well-Known Member

    Joined:
    16 July 2014
    Messages:
    94
    Likes Received:
    17
    Did you enter into a contract with her for the sub-lease that set out specific terms? Because your obligations will be dictated by those terms. As it is a sub-lease, rather than an assignment, then the Sub-Lessor is ultimately responsible for the obligations under the lease until its expiry but this is still subject to what terms you agreed with her for the sub-lease.

    There should be a clause in either the original lease or the terms of your sub-lease that sets out what happens when the tenant remains in the premises after expiry of the initial term. Are you able to locate that clause?

    From what you've mentioned above, and subject to clarification of the sub-lease terms, there doesn't seem to have been an implied agreement to exercise an option or to enter into a new lease etc, so it would seem to me like you are simply on holdover and able to vacate with 1 month's notice.
     
    John R likes this.
  7. Kirsten Smith

    Kirsten Smith Active Member

    Joined:
    16 July 2014
    Messages:
    5
    Likes Received:
    0
    Yes i just sent an email saying that we are looking at other properties for rent in the area and that I would give her one months notice to vacate. That went down like a lead balloon she came over to the shop and abused me. Also stating that she will be charging me for the rates last year that she forgot to give me the bill for. Do I have to pay this rates bill
     
  8. AnnaLJ

    AnnaLJ Well-Known Member

    Joined:
    16 July 2014
    Messages:
    94
    Likes Received:
    17
    Well that all depends on the terms of your sub-lease. Does your sub-lease state you must pay 'outgoings' in addition to the rental? If it does, it should list out what items are included in the outgoings you must pay.

    From what you've told me, it does seem you are on holdover of lease (though I can't definitively confirm that without knowing all of the details) so I am still of the opinion that you are within your rights to give one month's notice to vacate.
     
    John R likes this.

Share This Page

Loading...