Caught Sneaking

DAVID was very excited when he decided to start his own business, being a retro sneakers shop.

He found a property that was previously an architect’s office located next to several cafés and retail stores with plenty of foot traffic.

David signed a three year lease with option to renew.

The lease required him to pay the legal costs of the preparation of the lease.

After two months of trading, David noticed that the shelving was falling off the walls and that skirting boards were lifting.

David rearranged the shop to deal with the damage; reducing his retail space.

David contacted the lessor but was told to read the lease carefully as the lease had terms to the effect that he was responsible for building maintenance and repair.

David, an avid googler, researched his rights under a commercial lease and concluded that in fact the lessor was correct; under a commercial lease, the lessee is generally bound by the specified terms of the lease.

As time moved on, so did the shelves and soon David could no longer effectively operate in the shop. David called his tradie who advised him the walls needed major structural repairs, costing upwards of $200,000.

At this stage, David sought legal advice.

David’s lawyer informed him that although he signed a commercial lease, in fact the premises was a retail shop, covered by the Retail Leases Act.

David was advised that as the building required significant structural repair and sections of the building were unusable, the Act implied terms into the lease, allowing David to proportionally reduce the rent payable to the lessor, based on the available use of the shop, and to recover overpaid rent until the shop is repaired.

Further, under the Act, the lessor is not permitted to charge the lessee the legal costs of preparing the lease.

David was very pumped as he left the lawyers office in his uber cool sneakers.

Thank you to Anthony Fogarty for his assistance with this column.

If YOU would like a particular issue addressed, please email me at manny@tblaw.net.au or call me on (02) 66 487 487.

 

By Manny WOOD, Solicitor