Hello! Thanks so much for your help on my last question, I hope you can help again.
We're just about to lease a commercial retail property.
We met with the previous tennant who said their front window was broken twice (not by him) and it was covered in building insurance, however…. he had to pay the excess.
We've been informed by our landlord that 'no no no, unless it's your fault the landlord pays the excess'
We called business Australia and they said we're responsible for the excess.
Is our agent just trying to wiggle us into signing their lease by saying what we want to hear?
He also said he can't write that on the lease because it's "common law" and if we have a problem with it, it's down to the law not him. It can't be changed.
But we're hearing different opinions.
What's the deal, can anyone clarify?
Thanks so much guys
What does your lawyer say?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
PS: TerryW is the go-to man here on that stuff from the legal standpoint.
Woh!!!! man that was quick!!
A lease is just a contract.You can negotiate anything in or out. Up to to you. Commercials they try and sucker the lessee into paying for everything. Had one in Port Hedland. Told them to scratch a whole bunch of stuff or they could shove it where the sun don't shine. Virtually neutered it into a standard residential rental agreement.
Spooky!! You don't have feathers and circle at great heights do you?
Thanks heaps guys, we're a young couple and this is our first commercial lease, so we're pretty sure he is just trying to tag us along.
But he's flat out said he won't and can't 'change the law' and refused to write what we asked on the lease to confirm that we don't pay the excess. He just said it by word of mouth which is all suss.
The lease isn't complicated, it's all standard, this is the only thing he's being weird about.
He's also getting quite agressive about it, saying he can't change the law and won't add what's already 'common law' to the lease.
He said 'Look I don't have the time to teach you the ins and outs of law and leases' etc etc. (patronising scare tactics to drop the subject)
We're just worried and would like to know our rights in case this situation arrises, what is the actual law.
Do we pay the excess or does the landlord in a situation that's not our fault?
Either way we want the lease, and we'll sign either way, we just want to know what we're up for in case this happens.
Thanks for the prompt replies guys
Run a mile!! People like these are absolute nightmares when push turns to shove. Never ever known a deal that was ever worth the drama when things turn to custard with these types.
Sounds like you haven't got a lawyer. Saving money on a lawyer will likely cost you a lot more in the long run.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Stupid question here, is it a gross or net lease ie who is paying the insurance? If the lease is net ie you pay all outgoings, (and the lessor being a scotsman – apologies to the Scots), I would be going for the lowest possible excess to minimise my out of pockets and maximising the tenant's cost of insurance. It is all about structure and what isn't in the lease as much as what is listed.
I would be carefully going over the outgoings, insurance provisions and the like to determine what might bite you on the backside.
I recommend you to get a lawyer. I am not a legal guy, but as far as I know you can pretty much draft any cause (as long as it is legal, of course) into your contract. Do not try to save money on the experienced lawyer right now, it will help your business in the future.
Absolutely demand a copy of the insurance policy.
Terry can correct me if I'm wrong but if a contract or lease doesn't specify who is liable for insurance excess' in an insurance event then liability cannot be inferred.
You guys are great thankyou!
We're signing a $15,000 a year lease, it's very low priced in the scheme of things. We want the property wether we have to pay the excess or not, we just want to know our rights as tenants for when it comes to the crunch.
We don't want to fork our for a lawyer when in the end we really need and want the property anyway wether we have to pay exceess or not, we just kind of want to know where we stand rather than 'word of mouth' promises.
I'm sure if we had an expensive property we'd be all over the lawyers but the risk here is so minimal.
There was no 'special' terms on the lease, everything was standard from REIV with no changes.
The part where he added the information we read through very thoroughly, and there was no notes, just yes or no questions that were obvious. Most things didn't apply to us so 'no' was checked in most circumstances.
There was no secret fine print, or dodgy conditions we didn't really understand. The only altered thing was that we can't spray paint in the building without permission. That's it.
Um what else can I help you with…
I liked what you said Freckle, that if no if a contract or lease doesn't specify who is liable for insurance excess' in an insurance event then liability cannot be inferred…
That means if he tries to put it on us, we can basically rebut and say, sorry where does it say we're liable?
Thanks again all
You're not out of the woods yet.
I would engage a good business insurance broker and make sure you are comprehensively covered. Even though he may have the property insured that may not absolve you from all liability. His insurance company may hold you responsible for something it interprets as a failure on your part or negligence. Say storing flammables or electrical set ups for example that exacerbated or caused a fire. You might have a situation where damage is to other persons and property outside of his coverage.
The thing about comprehensive cover is that regardless of who's wrong or right you simply hand the claim over to your insurer and they fight it out. Peace of mind.
My guess is you will need copies of his insurance to understand your situation and exposure. Ask for them in writing with the reason being so that you can ensure you are covered adequately in case of an event.
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