How the Property Law Bill 2023 is changing commercial leases in Queensland.
In February 2023, the Property Law Bill 2023 (QLD) (Bill) was introduced into the Queensland Parliament following several months of professional feedback. If passed, the Bill will introduce some of the biggest changes to the Queensland property industry since 1974.
Commercial Leases in Queensland now
Commercial leases are contracts between two parties, with the terms usually being determined by the lease itself.
In Queensland, commercial leases are divided into two categories: retail and non-retail. Retail leases pertain to the sale of goods and services to end consumers, while non-retail leases are for other commercial purposes such as offices, manufacturers, distributors, and warehouses.
There are various laws that regulate commercial leases, including the Property Law Act 1974 (QLD), which require specific procedures to be followed by both landlords and tenants in exercising their rights and the Australian Competition and Consumer Law Act 2012 (Cth), which prohibits misleading and deceptive conduct.
Furthermore, the Retail Shop Leases Act 1994 (QLD) governs retail shop leases. In the event of inconsistencies between the lease terms and the Act, the Act will take precedence. The protections under the Retail Shop Leases Act are exclusive to retail leases and do not apply to non-retail commercial leases in Queensland.
Proposed Changes
The Bill introduces new standard lease terms which will be implied into all commercial leases. It also introduces an assignment process, requiring lessor’s to deal with requests from lessee’s expeditiously.
The standard terms include:
lessee payment obligations;
repair obligations;
how rent is to be abated if the premises is destroyed or damaged;
a prohibition on assignment without consent of the lessor;
prohibition on noxious or offensive acts or things;
the entitlement to quiet enjoyment;
prohibition on the change of use;
the lessor’s power to inspect;
the lessor’s power to terminate the lease for non-payment of rent or other breach; and
removal of lessee’s fixtures and repair obligations at the expiry of the lease.
The new assignment process requires a lessor to decide whether it consents to the assignment of the lease to a new tenant within 1 month of receiving a tenant’s request to assign the lease alongside all information required under the lease enabling the lessor to approve the new tenant. If a lessor fails to give their decision within one month, the lessee can apply to the court to make a decision about the lessee’s request for consent. Consent is not implied after the lapsing of that time frame.
Lessors should ensure that any commercial leases signed after the Bill is enacted incorporates the standard terms and that their leases adequately and extensively list all documents necessary to analyse the proposed new tenant’s capacity to take over the lease.
Legal Synthesis can help ensure compliance with the new legislative requirements, as well as advise lessor’s and lessee’s on their rights and obligations under commercial leases in Queensland.
Further updates will be circulated as the Bill progresses through Parliament.
Further Information:
If you have any legal questions relating to the above, please contact us through our online form or via email at hello@legalsynthesis.com.au.
DISCLAIMER:
The information in this article is of a general nature. It does not constitute formal legal advice, and should not be relied on as such. If you are seeking legal advice about a specific matter please contact us to discuss.