We currently have a commercial lease on a residential, furnished property in a QLD town. The new home came with the commercial lease when we bought it. We have a managing agent who manages the property but we have been using the commercial lease instead of a standard property lease. Now 9 months on it is time for both parties to notify our intentions for continuation of the lease. The leasing party (who sublets out to mining companies) has come back saying they do not wish to continue the 1+1+1+1 lease until at least 9 months from now until they see where the mining is going but they are "optimistic that things will pick up after the aust and chinese elections". Instead they want to lease on a month by month basis with the option of paying only half the rent for times when the properties are vacant. The reason they are no doubt doing this is the that our lease rent is probably about $200 pw higher than the market rent and our lease does not allow for a deduction in rent. What they are proposing sounds dodgy to me. Our real estate has suggested we get legal advice but the solicitor we used when we purchased had no idea about commercial leases so not sure who to turn to. Any advice would be appreciated. We were advised of this proposal via a generic letter sent to all tenants in the same street who are renting through them. Thanks, Janice
- which state is the property in? (my reference is NSW).
- if the fixed term is over 3 years the residential tenancy act would not apply, so a commercial lease could be used
- they are not exercising their option. End of story, they can go on monthly if you agree or you can give notice to vacate upon expiry of the lease (consider what the vacancy rates are like and what the alternatives are ie long or short term vacancy with $X rent achievable). An option is just that, optional at the tenant's right to decide whether to continue or not.
- Who is doing their negotiation (by the sounds of it, the managing agent (who should be working for you not the tenant)?
- You can decide to negotiate a new lease at current market but it would be a complying residential lease not a commercial lease agreement.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
