Are you the landlord or tenant of a commercial premises in the ACT? Is your lease registered? What happens if your lease is not registered? HKH sets the record straight – read on.

First things first, what is a lease?

In the ACT, all land is leased from the government under what is called a “crown lease”. However this article is concerned with what is properly called a ‘sublease’ in the ACT, that is, where an owner (landlord) leases land to a tenant.

What is ‘registration’ of a lease?

Registration is when a copy of the lease is provided to ACT Land Titles, and for a fee the lease is registered against the title of the property.

What can happen if I don’t register my lease?

As long as the lease is validly executed, a failure to register the lease does not make the agreement between a landlord and tenant invalid.

However, if the term of your lease is greater than 3 years (including the option periods) and a bank has a mortgage over the property, then as a tenant, it is in your interest to ensure the lease is registered.

Why? Because if the lease is not registered on the title, the bank does not have to recognise your right to occupy the premises under the lease (unless it has specifically consented to the lease).

What does this actually mean though? If the landlord were to become insolvent or defaults under a mortgage over the premises a bank is well within their rights to sell the premises and force you to vacate. Your right to occupy the premises in this circumstance is not protected unless the lease is registered.

My lease term is less than 3 years – do I need to register the lease?

If your lease term (including any option to renew) is 3 years or less, the Land Titles Act 1925 protects a tenant’s right to occupy the premises under the lease.

HKH acts for landlords and tenants in a variety of commercial leasing matters. If you need help with any commercial leasing matters, contact us today.

 

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