A landlord may wish to relocate a tenant for a variety of reasons. With a view to maintaining a harmonious relationship between the parties, a landlord would normally seek to reach agreement with its tenant so that the relocation takes place on a co-operative basis. However, when the parties cannot reach agreement and the relocation clause in the lease must be triggered, the implied provisions in the Retail Shop Leases Act require the landlord to give the tenant certain information before the relocation notice is effective. Specifically, the relocation notice must give the tenant:
1. details of the proposed refurbishment, redevelopment or extension of the Centre (“the proposed works”);
2. details of the “reasonably comparable” alternative premises; and
3. the date by which the tenant must vacate
Simple? Probably not because there is likely to be an element of uncertainty over whether there is a “genuine proposal” to carry out the proposed works or whether the alternative premises are “reasonably comparable”. If the tenant disputes the validity of your relocation notice then you may find yourself in the Tribunal. There are no apparent limits on what the Tribunal may take into account when considering what constitutes a “genuine proposal” or what is “reasonably comparable”.
Some recent decisions under equivalent retail leases legislation in Victoria and NSW have provided useful guidance as to how the Tribunal may interpret the implied provisions in the Retail Shop Leases Act.
1. Details of the proposed works
There must be enough details in the relocation notice so that the affected tenant can come to a conclusion about whether the proposed works:
(a) are a “genuine proposal”;
(b) will be carried out within a reasonably practicable time after the tenant is relocated; and
(c) cannot be carried out without vacant possession.
Consequently, we recommend that you provide as many details of the proposed works as you can when giving a relocation notice.
2. Details of the “reasonably comparable alternative premises”
The relocation notice must give the tenant enough details about the alternative premises so that it can form a view as to whether the alternative premises are “reasonably comparable” to the existing premises. Apart from the obvious details like size, location and any adjusted rent, the Tribunal may also consider the commercial value, exposure to traffic, or general appearance of the alternative premises to determine whether they are “reasonably comparable”.
The minimum information that should be set out in a relocation notice includes:
(a) the size, layout and location of the alternative premises (preferably shown on detailed plans);
(b) the proposed rent (if it is to be adjusted to take account of the different commercial value of the alternative premises);
(c) any unusual or distinguishing features of the alternative premises; and
(d) any information of special relevance to a particular tenant (e.g. a food retailer should be given information about the location and size of any grease trap servicing the alternative premises).
3. The date by which the tenant must vacate
The relocation notice must be given at least 3 months before the tenant is required to relocate. As always, it is best to issue the notice as early as possible. The closer it is to the commencement of the works, the stronger the bargaining position of the tenant if the notice is defective.
Generally, you should also ensure that the relocation notice is given to the tenant in the manner provided for in the lease. When posting, you should allow a minimum of 2 business days for delivery. Service by fax or email is not recommended unless specifically provided for in the lease.
The consequences of a defective relocation notice could be dire. If you are considering forced relocations of tenants then we recommend that you seek legal advice to minimise the risk that your relocation notice is open to challenge. Our experienced team of retail property lawyers are ready to provide you with whatever assistance you need.
Monday, August 10, 2009
Wednesday, July 29, 2009
Review of children’s provisions
The Institute of Family Studies has been requested by the Federal Attorney General to review the 2006 amendments to the Family Law Act, sometimes called the shared care amendments.
[Barry Nilsson] I am confident that the Institute can cut through the self-interested anecdotal based lobbying to reach a sensible conclusion. Anecdotes are typically boring and irrelevant. One outcome should be to recommend simplification of the convoluted provisions in the Act.
Tony Abbott’s reported suggestion to allow couples to opt into a fault based system are not likely to live long in the public mind. [Barry Nilsson]
For more information, please contact Don Leembruggen or visit Barry & Nilsson Lawyers.
[Barry Nilsson] I am confident that the Institute can cut through the self-interested anecdotal based lobbying to reach a sensible conclusion. Anecdotes are typically boring and irrelevant. One outcome should be to recommend simplification of the convoluted provisions in the Act.
Tony Abbott’s reported suggestion to allow couples to opt into a fault based system are not likely to live long in the public mind. [Barry Nilsson]
For more information, please contact Don Leembruggen or visit Barry & Nilsson Lawyers.
Income disparity
The Australian Institute of Studies has released a study confirming the long held view that divorce has lasting impacts on women’s income levels compared with their male partners. [Barry Nilsson] The information collected to reach this conclusion was compiled since 2001. There has, of course, been major legislative change in the form of the `shared care’ amendments during the study time. It is my experience that the `shared care’ regime and greater flexibility by employers has enabled mothers to re-enter the workforce far sooner. [Barry Nilsson] I suspect the reported gap will close somewhat over the near time.
Legal advisers should always be aware of spouse maintenance entitlements. I am sure many women have been `short changed’ by their advisers by not recommending the pursuit of this entitlement.
For more information, please contact Don Leembruggen or visit Barry & Nilsson Lawyers.
Legal advisers should always be aware of spouse maintenance entitlements. I am sure many women have been `short changed’ by their advisers by not recommending the pursuit of this entitlement.
For more information, please contact Don Leembruggen or visit Barry & Nilsson Lawyers.
Tuesday, July 28, 2009
Sharon Templeton - Promotion to Partnership
We are pleased to announce the promotion of Sharon Templeton to partnership. Sharon commenced with the firm as a Senior Associate in 2001 and has over 10 years experience in construction litigation and insurance law. She acts for insurers, self-insureds and underwriters with respect to complex public liability, product liability and property damage claims. Sharon also advises on risk management and coverage issues frequently linked to these matters. [Barry Nilsson] One of her specialisations is defending local authorities in relation to claims involving flooding, subsidence, town planning and road maintenance issues. Sharon also has a broad range of experience advising on liability for claims arising out of major building and construction projects, including contractual claims and dual insurance.
Insurance Law Review - 2009
Our seventh Annual Insurance Law Review titled “Weathering the Storm” will be held in Brisbane and Sydney in September 2009.
Dr Andries Terblanché, Chairman of Financial Services for KPMG, will discuss the global financial crisis in an insurance context.
For more information click here to register your interest.
Check out the latest articles form Barry Nilsson.
Dr Andries Terblanché, Chairman of Financial Services for KPMG, will discuss the global financial crisis in an insurance context.
For more information click here to register your interest.
Check out the latest articles form Barry Nilsson.
Thursday, June 25, 2009
Court of Appeal declares that "ratchet" rent review clauses in retail shop leases are ok
Connor Hunter v Keencrest Pty Ltd [2009] QCA 156
The Queensland Court of Appeal has today declared that ‘ratchet’ rent review clauses in a lease are permitted by the Retail Shop Leases Act 1994 (“Act”). Ratchet rent review clauses do not allow CPI or market rent reviews to decrease the rent.
Section 36(e) of the Act provides that a rent review clause in a lease is void if it provides for the rent to change in accordance with whichever of two or more methods of calculating rent will result in the highest amount.
The tenant in this case (Keencrest Pty Ltd) successfully argued at first instance that the ratchet rent review clause was void because it stopped the rent from decreasing. [Barry & Nilsson] However, the Court of Appeal by a 2 to 1 majority, has today overturned that decision.
The Court of Appeal considered the wording of section 36(e) of the Act and noted that it refers to methods of calculating a ‘change’ in the rent. By requiring the rent to remain the same if there was to be no increase, the Court concluded that the ratchet rent review clauses did not fall foul of section 36(e) because if rent remained the same then there would be no change in the rent.
The Court found that the wording of section 36(e) was clear and so it considered that it was not entitled to have regard to the explanatory memorandum for the Act and the Minister’s second reading speech from 1994, [Barry & Nilsson] despite that fact that these sources made it clear that it was the Parliament’s intention to prohibit ratchet rent reviews.
After nearly 15 years, this decision overturns the previously held belief that ratchet rent review clauses in retail shop leases are void. In light of the express intention of Parliament to discourage these types of clauses, it is likely that we can expect further amendments to the Act to reverse this decision in the near future.
We recommend that you do nothing for future leases. It would be a brave landlord who re-tests the intent of Parliament.
For further information on this topic, please contact Cameron Graham, Clive Nichol or Sonia Whitehouse at Barry & Nilsson Lawyers.
The Queensland Court of Appeal has today declared that ‘ratchet’ rent review clauses in a lease are permitted by the Retail Shop Leases Act 1994 (“Act”). Ratchet rent review clauses do not allow CPI or market rent reviews to decrease the rent.
Section 36(e) of the Act provides that a rent review clause in a lease is void if it provides for the rent to change in accordance with whichever of two or more methods of calculating rent will result in the highest amount.
The tenant in this case (Keencrest Pty Ltd) successfully argued at first instance that the ratchet rent review clause was void because it stopped the rent from decreasing. [Barry & Nilsson] However, the Court of Appeal by a 2 to 1 majority, has today overturned that decision.
The Court of Appeal considered the wording of section 36(e) of the Act and noted that it refers to methods of calculating a ‘change’ in the rent. By requiring the rent to remain the same if there was to be no increase, the Court concluded that the ratchet rent review clauses did not fall foul of section 36(e) because if rent remained the same then there would be no change in the rent.
The Court found that the wording of section 36(e) was clear and so it considered that it was not entitled to have regard to the explanatory memorandum for the Act and the Minister’s second reading speech from 1994, [Barry & Nilsson] despite that fact that these sources made it clear that it was the Parliament’s intention to prohibit ratchet rent reviews.
After nearly 15 years, this decision overturns the previously held belief that ratchet rent review clauses in retail shop leases are void. In light of the express intention of Parliament to discourage these types of clauses, it is likely that we can expect further amendments to the Act to reverse this decision in the near future.
We recommend that you do nothing for future leases. It would be a brave landlord who re-tests the intent of Parliament.
For further information on this topic, please contact Cameron Graham, Clive Nichol or Sonia Whitehouse at Barry & Nilsson Lawyers.
Wednesday, February 11, 2009
Barry and Nilsson - Financial agreements and property settlements - the pitfalls
It is increasingly the policy of our governments that parties to an ended marriage or de facto relationship should be able to resolve their differences by way of agreement, rather than litigation.
It is also the case that newly committed couples are encouraged to enter into agreements to spare themselves further heartache upon the foreseeable, [Barry and Nilsson] yet unwanted, demise of their relationship.
Of the latter variety, there is still some resistance, particularly from young couples, who see the negotiation and existence of such an agreement as unromantic and contrary to the very nature of their new commitment. And before we laugh at their naivete, it must be remembered that it was not too long ago that such agreements were deemed void in Australian law as a imposition upon the sacred institution of marriage. There is some small hypocrisy in making a vow “for life” and at the same time negotiating to break that vow.
But, now we have them, and they ought to be used. Our preferred form of advice to unwilling couples is to think of the agreement a little like a will. No-one plans to die, certainly not in the short term future, and yet a will provides for that eventuality.
It is also our experience that agreements made at the start of a relationship can disfavour women. Even couples willing to enter into agreements generally negotiate it on the basis that what each party brings in to the relationship is theirs and they will split what they acquire during the relationship equally. It seems fair, but it’s usually not. [Barry and Nilsson] The reason being is that inevitably during a lengthy relationship, the dynamics of the relationship change. One party, usually the man, acquires the greater financial control. One party, usually the woman, sacrifices career and money for the primary care of children. Inevitably couples do not consider the “future needs factors” the courts must consider in property settlements in Queensland – for both married and de facto couples.
There are mechanisms to counter this – sunset clauses, contingency clauses and the like. All are acceptable. But even sophisticated couples will be reticent to find out they might have to do this unromantic thing again, perhaps at a time when the relationship is at its zenith – at the birth of a child.
Further still, our governments have decided that if the agreements don’t “tick all the boxes” the relevant legislation requires, then the parties may well have not bothered. If a de facto couple does not have a “recognised separation agreement” as opposed to an “agreement,” or if a married couple does not have a “binding financial agreement” as opposed to an “agreement,” then the agreement is almost of no value whatsoever.
What does this all mean?
Unfortunately, and perhaps in spite of the governments’ policies, it is simply impossible for these agreements, if they are to be just, equitable and binding, unless each party consults upon a family lawyer. If you, or someone you know, is about to start living with someone else, get married, or is dealing with the death throes of a relationship, encourage them to enter into an agreement and to seek the appropriate advise to make the agreement work.
For further information on this topic, please contact Barry and Nilsson Lawyers.
It is also the case that newly committed couples are encouraged to enter into agreements to spare themselves further heartache upon the foreseeable, [Barry and Nilsson] yet unwanted, demise of their relationship.
Of the latter variety, there is still some resistance, particularly from young couples, who see the negotiation and existence of such an agreement as unromantic and contrary to the very nature of their new commitment. And before we laugh at their naivete, it must be remembered that it was not too long ago that such agreements were deemed void in Australian law as a imposition upon the sacred institution of marriage. There is some small hypocrisy in making a vow “for life” and at the same time negotiating to break that vow.
But, now we have them, and they ought to be used. Our preferred form of advice to unwilling couples is to think of the agreement a little like a will. No-one plans to die, certainly not in the short term future, and yet a will provides for that eventuality.
It is also our experience that agreements made at the start of a relationship can disfavour women. Even couples willing to enter into agreements generally negotiate it on the basis that what each party brings in to the relationship is theirs and they will split what they acquire during the relationship equally. It seems fair, but it’s usually not. [Barry and Nilsson] The reason being is that inevitably during a lengthy relationship, the dynamics of the relationship change. One party, usually the man, acquires the greater financial control. One party, usually the woman, sacrifices career and money for the primary care of children. Inevitably couples do not consider the “future needs factors” the courts must consider in property settlements in Queensland – for both married and de facto couples.
There are mechanisms to counter this – sunset clauses, contingency clauses and the like. All are acceptable. But even sophisticated couples will be reticent to find out they might have to do this unromantic thing again, perhaps at a time when the relationship is at its zenith – at the birth of a child.
Further still, our governments have decided that if the agreements don’t “tick all the boxes” the relevant legislation requires, then the parties may well have not bothered. If a de facto couple does not have a “recognised separation agreement” as opposed to an “agreement,” or if a married couple does not have a “binding financial agreement” as opposed to an “agreement,” then the agreement is almost of no value whatsoever.
What does this all mean?
Unfortunately, and perhaps in spite of the governments’ policies, it is simply impossible for these agreements, if they are to be just, equitable and binding, unless each party consults upon a family lawyer. If you, or someone you know, is about to start living with someone else, get married, or is dealing with the death throes of a relationship, encourage them to enter into an agreement and to seek the appropriate advise to make the agreement work.
For further information on this topic, please contact Barry and Nilsson Lawyers.
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