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Wk 8: Leases Part B - Coggle Diagram
Wk 8: Leases Part B
Assignments, Sub-lease
Normally, a restriction in lease on ability of tenant to assign and/or sub-lease the premises
Where there is no express clause on this issue then the law presumes in favour of the tenant that they can assign/sub-lease without permission of the landlord
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There is either an absolute provision or permission can be granted with conditions imposed by the ladlord
Covenants restricting the right of the lessee to assign/sub-let is strictly construed in favour of the lessee. This is because if these clauses are breached a landlord has a right to forfeit and re-enter Russell v Beecham [1924] (fundamental breach)
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Sub-leases occur if the tenant does not need to use all of the premises so they sub-lease a portion of the premises to sub-lessee
The clause/covenant must expressly refer to either or both of assignment and sub-letting, the law does not fill in the gaps
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Most common type of clause is that the lessee cannot assign/sub-lease without consent of the landlord: s 121 of PLA will apply
S 121 implies into all such clauses that the consent of the landlord will not unreasonably be withheld: s 121(1)(a)(i)
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This section applies irrespective of any clauses in the lease implying the contrary. It cannot be contracted out of.
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Case law on what is an unreasonable refusal of consent by landlord is wide and varied depending on the circumstances
If clause is breached by the tenant it does not automatically result in the transaction being void
BUT it can attract a right of forfeiture in the hands of the landlord
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Renewal of lease
When considering a lease bargain/deal, options for further renewal of the lease are an important factor from the perspective of the prospective tenant
It is a factor which touches and concerns the land and therefore can be enforced by subsequent RP. S 188 PLA
Where lease is registered (long), the option to renew is also protected by registration. It has priority over subsequent mortgagees registered on title.
Mercantile Credits Ltd v Shell Co (Aust) Ltd
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PLA 1974
LTA 1994
Residential Tenancies Act & Rooming Accommodation Act 2008
Retail Shop Leases Act 1994