When signing a lease, tenants often focus on the rental amount, duration, and other commercial terms of the agreement. However, it’s essential to pay equal attention to the fine print.
Hidden in the fine print of a lease may be a demolition clause. This type of clause can have significant implications for tenants, as they grant landlords the right to terminate a lease prematurely if they intend to demolish the property. In Queensland, the Retail Shop Leases Act offers crucial protections to safeguard tenants from potential exploitation and ensure fair dealings between landlords and retail shop tenants.
To ensure protections for retail shop tenants, the Act includes several provisions that protect them in the event of a potential lease termination due to demolition:
Mandatory Notice Periods – Under the Act, a landlord must provide the tenant with a written notice before exercising their right to terminate the lease due to demolition.
Compensation – If a landlord terminates a lease under a demolition clause, the Act provides the tenant with compensation. This compensation is meant to cover reasonable expenses incurred due to the termination, such as relocation costs and fit-out expenses at the new premises.
Landlord’s Obligations – The Act places certain responsibilities on the landlord when exercising a demolition clause. For instance, the landlord must genuinely intend to demolish the building, and they must act in good faith throughout the process.
Navigating the terms of leases can be complex. Tenants should always seek legal advice before entering into any lease agreement.
Our experienced lawyers can review the terms of the lease, ensure you are protected under the Act, and offer guidance on how to negotiate favourable lease terms. Click here to book a 20 minute free consult with us.
