Breach of a Lease:

Lease Agreements are written contracts which authorise the tenant to occupy a property owned by the landlord and set out the rights and obligations of the parties during the term of the Lease. A Lease will usually provide coverage of the following key issues:

• The amount of rent to be paid by the tenant to the landlord and whether the rent is subject to variation during the term and if so, how this variation is to be calculated.
• Who is liable for various outgoings for the property such as water, electricity, Council rates and strata levies, and how any contributions are calculated.
• The options that are available to the parties in the event the property is significantly damaged, for example, if it was damaged by fire or storm.
• How often the landlord may inspect the property and the notice to be provided to the tenant of this proposed inspection.
• That the tenant is responsible for the maintenance and general repair of the property (subject to reasonable wear and tear) and they must restore the condition of the property on the conclusion of the term of the Lease. There are certain types of damage that the landlord will usually be responsible for (for example, structural damage or damage to fixtures including air conditioning).
• Whether the parties are able to indemnify themselves from the other party if they have suffered loss or damage in certain circumstances.
• The dispute resolution process that is to be implemented if the parties are in dispute.
• How and in what circumstances the Lease Agreement can be varied, terminated or renewed.
• Whether there is a right to set off if both parties owe the other money under the terms of the Lease Agreement.

Lease disputes most often arise where the parties are not across the terms of the Lease Agreement and the procedures that must be followed should certain events occur. A common dispute is where the tenant withholds the payment of rent because the landlord has failed to undertake remedial works that the tenant considers to be the obligation of the landlord. There are often disputes over who in fact is liable for certain works at the property. Under commercial property Lease Agreements, disputes often involve the tenant asserting that certain rights exist under the Lease, such as an entitlement to signage, car spaces or the use of common property, with such rights being contested by the landlord.

In our experience, where a dispute has emerged, many parties do not have any knowledge of the dispute resolution process often particularised in the terms of their Lease Agreement. A failure to conform to this process will be a breach of the Lease and could expose a party to a claim being made against them, especially if the other party has incurred a loss because of this contravention. The purpose of a dispute resolution clause is to try to facilitate an informal and expedient resolution to a dispute without the need for the termination of the Lease Agreement or legal recourse.

It is essential that you seek legal advice if you are engaged in a Lease dispute and you should do so prior to taking any significant action under the Lease Agreement. Whilst you may have a preferred method for managing the dispute, for example, you may wish to terminate the Lease Agreement or withhold payment, you should obtain advice to determine whether your preferred action is in fact permitted under the terms of the Lease Agreement.

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.

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.