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Lease Agreements should have a clause which sets out the circumstances in which the Lease can be terminated and the procedure that needs to be followed for this to occur. A termination clause may require a notice being served on the other party of their intention to terminate the Lease if certain action is not taken, for example if a breach of the Lease is not remedied within the prescribed time. A termination notice will usually be required in writing and must be served on the other party in accordance with the approved methods set out in the Lease (for example by registered post or hand delivery may be required). It is very important to ensure that the process is strictly adhered too to prevent yourself from being in contravention of the Lease. A breach of the Lease could expose you to a claim for any consequential loss suffered by the other party.

Parties often seek to terminate a Lease because the other party has failed to comply with their contractual obligations, including a failure to pay rent and outgoings on time or failing to undertake necessary maintenance and repairs, however many do so prematurely. Prior to terminating the Lease, the contravening party may be allowed an opportunity to remedy the default. It is important to ensure that any such opportunities are provided prior to proceeding to termination as otherwise you may be in breach of the Lease.

A Lease may also require the parties to undergo a dispute resolution process before termination is an available option. It is common for people to overlook this requirement. The benefits of such a clause is that it allows the parties an opportunity to attempt to resolve the dispute informally, quickly and without legal recourse. You should seek advice as to whether there is such a clause in the Lease, whether it applies, how it will operate and the outcomes available following the dispute resolution process.

If you wish to speak with one of our Lease Advice & Litigation Lawyers, please contact our firm by telephone on (02) 9233 4048 or send an email to info@navado.com.au.

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