Rental rights for commercial tenants

“Residential property is property where a person lives, like a house or an apartment. On the other hand, commercial premises are generally split into two categories: retail shops and everything else,” say William Roberts Lawyers Principal Carlos Jaramillo and Associate Glenda Lam.

“The rental of residential property and the lease of a retail shop are both heavily regulated,” they tell us. “Commercial premises other than retail shops are not.”

Of course, there are exceptions to this rule. “An example is where the commercial premises are an industrial site or have a regulated or licensed business,” they say.

The legal framework

Jaramillo and Lam say that the other important thing to note is that each state and territory has its own legislation. “That legislation regulates practically all aspects of the rental of residential property and the lease of a retail shop,” they say.

So if you’re leasing a commercial retail premises, your rights are set out under both state-specific legislation and your lease (provided that it complies with the legislation). For example, in NSW, retail leases are governed by the Retail Leases Act 1994, which includes provisions for tenant rights.

Some of those tenant rights include the right to request a copy of the lease at the negotiation stage, the right to be provided with a retail tenancy guide, the right to receive a disclosure statement from the landlord and the right not to pay undisclosed contributions under the lease.

“The legislation also regulates the standard terms of a retail shop lease and who pays for the cost of preparing a retail shop lease.” However, if a commercial premises are not a retail shop, then there is little regulation. “Most matters are left to the landlord and tenant to agree,” they say.

Resolving a dispute

So what happens when there is a dispute? In the situation of a retail lease, it’s pretty clear-cut, according to William Roberts Lawyers.

“In the case of the lease of a retail shop, the legislation for each state and territory sets out a process for dispute resolution. In the majority of states and territories, there must first be an attempt at resolving the dispute by way of either mediation or some kind of settlement meeting before the dispute can be determined by the court or tribunal that has jurisdiction over the dispute. This is an attempt to ensure that landlords and tenants at least have a go at settling their dispute.”

It’s also very important to make sure that you check time limits for making an application for the determination of a retail lease dispute, say Jaramillo and Lam. “Sometimes there is only a limited amount of time to do so and those times can differ from the usual time limits for commencing civil claims,” they say.

However, in the case of the lease of a commercial premises other than a retail shop, disputes that cannot be resolved between the landlord and the tenant will generally have to be determined by a court.

“If that occurs, then most courts will require the landlord and tenant to engage in informal settlement discussions or mediation at some point,” they say.

So if you find yourself caught up in a dispute, be sure to know where you stand – in other words, are you disputing a situation that involves a residential, retail or other commercial premises? Once you’ve determined that, be sure to consult your lease agreement and supporting legislation to know your rights. And if you’re still unsure, get some independent legal advice – it will be well worth it.