Can I Renew My Lease
Firstly, does the lease contain a Further Term? If not, it is entirely the landlord's decision as to whether a new lease is offered. So be very cautious about entering a Lease or buying a business with a lease already in place, where no Further term is included. You could spend a small fortune setting up or buying a business only to find that you may be required to shut down and relocate your business at Lease expiry, with no compensation payable to the Tenant for loss of trade or relocation costs etc. Note that the Landlord is required to give the Tenant a minimum of six (6) months' notice to either offer the Tenant a new lease or to give a notice to vacate. However, if you have a Further Term (also called an Option), then you have up to three (3) months prior to the Lease expiry date to confirm your ongoing leasing intentions.
Warning: all leases will have a clause whereby the Landlord does not have to accept the tenant's renewal request, if the tenant has been notified of constant breaches of the Lease - e.g. late payment of rental or outgoings, failing to maintain the property, not complying with specific obligations for servicing of equipment (airconditioning, exhaust canopies, etc), changing the permitted use of the premises, taking/or omitting to take action that voids the Landlord's insurances, damaging and not repairing the property etc. These scenarios are referred to as Essential Terms and are nominated in the lease. So, to drive down the 4-lane highway, do the right thing by paying your rental and outgoings by the due date, look after the property by complying with notices, and basically don't give the Landlord a basis by which the renewal can be denied.
So, everything being fair and reasonable, the landlord or Landlord's Agent will issue a Notice between 6-12 months before the lease expiry dtae offering the tenant the opportunity to take up the Lease Option. As previously mentioned, the Tenant must confirm it's intentions by no later than three (3) months before the Lease expiry date. If the Tenant fails to do so, even by one day, the right to renew the Lease fails to the Landlord as to whether it is granted. This can be a very costly mistake by the Tenant.
So, if you want to renew the Lease, do so in writing at least three (3) months before the expiry date, and if uncertain about any aspect of the Lease or renewal process, please consult your legal representative.
Have a question? Contact Laurie Raymond.