QLD Commercial Lease for Salon - Too Many Issues!

[Romey]

Hello Experts,

I am seeking your opinion or advice to solve the issues with my commercial lease. I try to put it into small bulletin points to explain the scenario, like what is going on.

I would like to add that, this is our first business and I was too naive to negotiate the lease myself, and did not get a solicitor's service and took it very lightly, mainly I guess it was because it is small business run by my partner only and thought of hiring a staff once the business grows a bit.

I am not sure if this is the right place to get share my experience, and get your opinion but I just want to give it a go

1. I looked for the shop to open up a very small salon for my partner
2. We found one shop and contacted the real estate agents. From our talk over phone we found there are two different leases, one you signed through solicitors and other one is called CTA which can be dealt directly through real estate agent, and its quicker, hassle free and you don't need to worry about registering title with NRW and hiring a solicitor.
3. And here we go, now the roller coaster ride starts. I started doing some research like what standard terms conditions needs to be negotiated, e.g. permitted use, signage locations, lease option for extending lease etc.
4. I realised agent was trying to avoid to talk through email. I thought he wouldn't want to bother to write what we discussed over the phone, and I thought that everything would be there in lease before I sign.
5. In Letter of Offer, Agent added the option to extend lease from 3 ( plus option for 3 years ). And I signed and the security deposit was 6 months, commencement date etc , and I signed and sent it through email, and same terms were there in CTA. I signed and sent it through email to the agent to sign for landlord.
6. When I received CTA, the option for 3 year lease was crossed out on with pen with initials (which the Agent told me option can be Added in CTA, without having a solicitor), security deposit was 6 month but manually changed it to 3 months.
7. I thought it is taking too much time, this whole process too almost took months and I was not sure whether, it is worth giving more time like to go for solicitor and again registration with NRW.
8. We agreed on the commencement date. When we entered the shop which was messy, we thought they would had gotten it cleaned during negotiation period, as we found during negotiation that the shop never had a fire extinguisher installed, which I need to get insurance, but we installed it and on commencement date, we entered in shop, there was no electricity and the electric wire was exposed, which were fixed after three days of commencement date. Our salon is very small, so I thought of setting up an interior ourselves, so we bought furniture like sofas, mirrors, salon chairs. Then we needed to make a small wall (partition for facial room ). We bought portable office partition to line up, to setup a room in a corner, and used curtain for entry.
9. After about three weeks, the agent came with concern that the landlord has asked him to check on us and inspect as somebody told him that we are running a brothel. Ohh Jesus that's just unbelievable. They looked around the shop, checked everything and we had a chat and they said it was all good and left. (Our business cater to ladies services only ) and business run by my partner.
10. After that I sent email to agent asking for permission to install security cameras inside shop and one outside shop facing drive way and our shop entry so I have a recording to prove that this is not brothel and offered him access to our camera monitoring system if he wishes to, and landlord refused to allow us to install a security camera for drive way. But that is ok at least we were given permission to install camera inside our shop.
11. Then he was using unprofessional words like remove your business signage like this is mediocre and unauthorised. I said this sign is not too bad and these things like, signage size, color, text were never subject to approval nor we were told at any occasion. And yes we were aware of the signage location which was already negotiated and we put up our signage accordingly, and we thought of changing signage later as we waiting for the website, Facebook, etc., which has to go there on our new signage. ( Our shop is all the way at the end of block, unlike a garage in residential units, and shop has no front exposure only signage can be installed/be visible at main entry to building side ways on small fence.
12. Landlord said that he has approved signage for other two shops in block and now ..for new signage which include size, Color , Text , Material etc has to be approved from him. I checked other two signages which has different material,text,color,size too. doesn't look professional at all. I never knew this signage thing is a big deal, I kept asking him to give me for new measurement that would likely to be approved by him before I remove it and I call signage professional to measure, prepare and install it. But he did not give me any measurements and only asked me to remove unauthorized signage immediately, and I got a little nervous and was feeling bit harassed, first by the brothel issue and now with the signage issue. (third other real estate shops/people around us watch us like we are aliens landed here to run a salon ..funny ) anyways after discussing with agent he said he would bring up issue with landlord, and nothing happened, no response no result and he has stopped answering my phone or email.
13. but I removed the signage, and as this is a very small business for my partner. I did not want any problems and issues . I removed the signage and sent email to agent and landlord to give me new signage details which can be ordered according to his measurement , color, text , material etc. but he did not reply for a week
14. then I send him another email, now it has been two weeks and no reply yet. as our business has no front exposure , we are not getting any walk-in customers at all.. now it is like a dead business unless we have any appointments. I wrote to Landlord if we are missing anything or he has any issues then I can fix it. this is not a big business but still we don't want any dramas.

Now my questions are: what should I do, it has been only two months since we signed up lease but we are facing these issues. I am trying to avoid any legal complications and I am more than happy to go back, start from scratch to fix anything we have missed, like , getting solicitor, getting proper lease with 3 years option, council permission if required. etc, and how do I deal with this landlord currently and I don't know what is cooking there. Only thing I know is our business is dead, our rent is due next week. Agent has stopped responding, Landlord is overseas since I started with offer of letter and till date, secretary(who handed us keys) has been told by landlord not to look after this shop anymore. And landlord is not replying us at all.

When agent came to inspect during brothel issue he told us that landlord is influential person,he knows every one in the area etc, been in real estate industry in 30 years. But I was wondering why they were telling us all this I don't know. What I am going to do with landlord influence bla bla . something is going on ...which I cant figure out ..

I am thinking of closing down business but it is waste of time, money and a loss at this stage.again how do i go about breaking lease, and work on this two months rent free periods, remove and reinstate shop etc.

I know my friends advised me to get a lawyer but I dont want to .. dont know if it worths wasting more time and money on legal issues. as this business is a small business and very new which requires time to set up things... and landlord aware of all this.

I am so confused what to do ? Should I go to court, Qcat, Legal Aid, Centrelink etc. ..just lost now.

 

[John R]

Hi @Romey
Sounds messy. Unfortunately, Legal Aid Queensland can't assist in commercial lease matters. See: Where to get help

Because of this, I echo the suggestion made by your friends. Spending $300-$500 for one hour with a property lawyer with commercial leasing experience now, will likely save you much more in the coming months and years than if you terminate the commercial lease incorrectly and the landlord pursues you and/or your partner for damages, court costs, etc.

All the best. Please keep us updated with your progress.

 

[Ian Macleod]

I agree with John R. This sounds very messy, but also sounds like you might have grounds to get out of the lease. There are retail leasing laws that differ from state to state. Each state has a body that administers the act and usually a dept you could talk to to have the matter dealt, with without involving a lawyer. What state are you in?

 

[Romey]

Hi John R and Ian Macleod,

Thanks for sharing your views .

I agree with John R, landlord might create more issues in coming months and years. so it would be good idea to get a commercial leasing lawyer to deal with landlord. I would prefer to get lease signed up from scratch if possible (have to check with lawyer). I cant rely on real estate agent and his so called Commercial tenancy agreement. which has different terms when I signed ( 3 years option ) and 6 month guarantee . which removed with pen when landlord signed it . I dont know why they dint prepare a fresh lease if options were to be removed.

and Yes Ian he is trying to create mess which I am trying my best to avoid, I still dont know why landlord is doing all this.
and I am located in Queensland, there is a tribunal name QCAT who deals with these types of lease disputes etc. but I dont know if their services are similar level to a commercial leasing lawyer.

I have contacted to landlord's personal secretary who gave me keys, she has advised me to wait 48 hours for reply from landlord. and in meantime I am here on this forum.

and Lets see how I go after 48 hours .. it all depends on what he replies, or does not replies at all. I will keep you updated about the progress.

Thanks heaps for sharing your opinions and views.

Romey

 

[Ian Macleod]

Hi John R and Ian Macleod,

Thanks for sharing your views .

I agree with John R, landlord might create more issues in coming months and years. so it would be good idea to get a commercial leasing lawyer to deal with landlord. I would prefer to get lease signed up from scratch if possible (have to check with lawyer). I cant rely on real estate agent and his so called Commercial tenancy agreement. which has different terms when I signed ( 3 years option ) and 6 month guarantee . which removed with pen when landlord signed it . I dont know why they dint prepare a fresh lease if options were to be removed.

and Yes Ian he is trying to create mess which I am trying my best to avoid, I still dont know why landlord is doing all this.
and I am located in Queensland, there is a tribunal name QCAT who deals with these types of lease disputes etc. but I dont know if their services are similar level to a commercial leasing lawyer.

I have contacted to landlord's personal secretary who gave me keys, she has advised me to wait 48 hours for reply from landlord. and in meantime I am here on this forum.

and Lets see how I go after 48 hours .. it all depends on what he replies, or does not replies at all. I will keep you updated about the progress.

Thanks heaps for sharing your opinions and views.

Romey

Yes that's right Romey, QCAT are there to protect the rights of both tenants and landlords.
You can submit a request in writing via:

• email: [email protected]
• post: QCAT, GPO Box 1639, Brisbane, QLD 4001
• fax: 07 3221 9156
• in person: QCAT, Level 9, BOQ Centre, 259 Queen Street, Brisbane

Below is an excerpt from our retail leasing kit for qld which sets out the lessors responsibility under Retail Shop Leases Act 1994

Pre-Lease requirements: What you need to give the lessee
Before the Lease is entered into, you need to provide the prospective lessee with:-

· A copy of the draft Lease – at least 7 days before a prospective lessee signs a retail shop Lease.

· A Disclosure Statement – at least 7 days before a prospective lessee signs a retail shop lease.

· A copy of the fully signed Lease – within 30 days after a retail shop Lease is signed by the parties, the lessor must give the lessee a certified copy of the signed Lease.

Before entering into a retail shop Lease, the lessee must give the lessor:-

· A Disclosure Statement;

· A Financial Advice Report; and

· A Legal Advice Report.

Be aware, that if you don’t provide the lessee with a Disclosure Statement, or if the Disclosure Statement is incomplete or it contains information that is false or misleading in a material particular, then the lessee has the right to terminate the Lease and seek compensation.

 

[Romey]

Hi John R,
and Hi Ian, Thanks for sending the lease requirements.

From the above paper work, there is nothing has been received or given during that stated period. except I signed letter of offer, and Commercial Tenancy Agreement was signed. We got shop keys. and only last week I sent agent shop pictures we took on commencement day, as proof of shop condition.

I have received email reply from Landlord. his email is again time wasting and harassing.
First
1) Brothel Issue ( Agents came to check on us because somebody told landord that we are running a brothel )
2) Signage Issue (called it mediocre , Unauthorised - We removed it Immediately but no details were given for new signage )
3) Business sales is almost dead because of no signage and no details are being finalized by landloard yet.
4) Now Current and Fresh Issue : As Below

Previously he said : signage LOCATION has been negotiated and APPROVED and asked me to remove -UnAuthorised signage immediately , which I did because I got really pressurized with first brothel issue. then Un-authorised signage Issue, then No business Signage for two weeks.

but landlord never gave me new signage details and said that I need to get an approval for, Text , Color , Size, Material , installation method etc., now after signage company gave me quote and signage details which i sent to landlord for approval. and I was waiting for 2 weeks.

Now current email says : Location is not above besser wall means NOW NEW ISSUE WITH LOCATION, and current reply also says SIZE AND POSITION are already approved during the negotiation. (meas signage was not un-authorised at first place )

and I also have been asked to get signage company to email him directly Detailed Drawings ( means more delay and strategically want my business completely dead and he knows rent is due in four days and our business has no front exposure and no side besser/boundary signage )

on top of that , asking me to get a narrow signage under besser wall. how narrow .. doesnt say anything . means again I have to get new quotation , new details from signage company to send him for approval.

I think it is time to talk to legal authorities now. This landlord is just too much stress for me now.

Thanks Heaps Ian and John R for your help.

 

[Romey]

Updates about our landlord's cheap tactics .. continues.....

it is exactly a month now , since I posted my lease issue last time : Just wanted to see how I go ...

I tried to solve this matter by negotiation my self .. to avoid any legal issue and more over legal cost ...

from last post : ..... he asked me to get a signage company to send him artwork and signage details directly .. which was done and details about signage at entry wall was mentioned, with installation method of signage along the besser wall but not above the besser wall as per his terms ..

after getting email from signage company landlord reply to signage company which was tricky again : asking signage company to install signage at rear wall and above the besser wall. and did not mention anything about approval at entry wall. ( both requires different installation method ).

and signage company thinks that approval has been giving for installation of signage at entry wall. which has mis-led to signage company ..

then he started another issue by saying he has received a drawing from agent which has 90 degree signage size ( weired , never heard of this ) .

finally I proved to landlord that he is sabotaging our business with his un-necessay cheap tactics to waste our more time which is resulting in our business with no signage for last two months now. ( all his cheap tactics are there in emails , he is overseas so we communicate through emails)..

and finally i could see a solution when he replied and he said it ok to install signage as originally negotiated in lease. .Jesus....what a relief....but for a few hours...

and then comes a big surprise next morning: this one is just unbelievable, that shows how a person could be the worst of worst..

A Legal letter from his solicitor : """ stating that my business may be providing services other than beauty salon . and according to clause this this.. contract can be terminated immediately """ but letter did not mention what other services .. about two months ago he sent his agent and secretary to check on us if we are running a brothel. ...but i ignored it thought ..not a good idea and focus on business. then came signage issue which has taken two months...

and I was like ..what the hell is this , i only proved to landlord that he is harassing me using his cheap tactics yesterday and finally signage issue nearly came to end . and this letter is issued backdated 5 days ago.. which is delivered today only..

.. then I rushed to a solicitor nearby .. and told him all about the mess and solicitor replied to that letter to his solicitor... now waiting for further drama from that cheap landlord. ..

and solicitor asked me do you want to terminate the lease or continue with lease..but i said i dont know yet... in both cases ...it is my loss ...and two months no sales only bills.

I forgot to ask my solicitor about it.. What actually happens if landlord cancel my contract .. does it affect to my image to lease other shops in future or something like bad history in real estate.

Sorry for long email again .. I try to write things with little description to make it easier to understand how things are going on..