QLD Retail Tenancy Agreement - Can I Sublet?

[JimQ]

Hi. I'm looking for information on a retail shop tenancy agreement in Queensland and all I can find online relates to leases, usually commercial. I get the impression that such agreements went the way of the dinosaur. Can anyone shed some light on this type of tenant/agent agreement under Property Law and if they are still acceptable?

Also, is it possible to sublet under such an agreement?

Thanks.

 

[Sophea]

Hi Jim,

I don't believe there are any hard and fast rules under the Retail Shop Leases Act (Qld). Whether or not you are able to sublet a portion of the leased premises will depend on the terms of your lease. Usually it will say something like - you need to obtain the landlord's permission but it should not be unreasonably withheld. You may also have to pay for any legal or other costs that the landlord may incur in responding to such a request. If the lease is silent on the matter, I would simply ask your landlord.

 

[JimQ]

Hi Jim,

I don't believe there are any hard and fast rules under the Retail Shop Leases Act (Qld). Whether or not you are able to sublet a portion of the leased premises will depend on the terms of your lease. Usually it will say something like - you need to obtain the landlord's permission but it should not be unreasonably withheld. You may also have to pay for any legal or other costs that the landlord may incur in responding to such a request. If the lease is silent on the matter, I would simply ask your landlord.

Hi Sophea,

Thanks for the reply, but the point I am trying to make is it is not a lease, which is a can be registered and has very definite rights and obligations on both parties. The document I am talking about is a tenancy agreement for a retail shop, which has very little legal standing. For instance a landlord can effortlessly evict you without any form of compensation if a premises is sold under a tenancy agreement. Whereas such an eviction is difficult under a lease and usually/normally would require compensation to the tenant. Basically the land has to buy back the lease term remaining.

Also I am looking at this from a potential sub let position thus I have no landlord the other party does via a tenancy agreement, which has no restrictions or special conditions in it. So we both assume it is legal.

Thanks,
Jim.

 

[Nighthelyn]

Dear Jim,

This link is from Queensland Government with guide for general information on retail leasing - http://www.justice.qld.gov.au/__dat...tail-Leasing-Guidelines-Booklet_Cover_web.pdf

Agree with Sophea - Retail Shop Leases Act (QLD) 1994 is silent as to whether or not sublet is allowed. It depends on what is noted in the lease. Usually, the lease may say:

1. Require Landlord's consent and it may be granted or not granted in the landlord's absolute discretion/reasonable consent.
2. Up to a % of the premises may be sublet without requiring consent of the landlord. Any above, need formal consent.
3. Inevitably all administrative and legal cost for the landlord to consider the request (so grant or not granted) the tenant usually is required to pay for all costs.

If you do obtain consent, make sure it is clear and in writing.

 

[JimQ]

Dear Jim,

This link is from Queensland Government with guide for general information on retail leasing - http://www.justice.qld.gov.au/__dat...tail-Leasing-Guidelines-Booklet_Cover_web.pdf

Agree with Sophea - Retail Shop Leases Act (QLD) 1994 is silent as to whether or not sublet is allowed. It depends on what is noted in the lease. Usually, the lease may say:

1. Require Landlord's consent and it may be granted or not granted in the landlord's absolute discretion/reasonable consent.
2. Up to a % of the premises may be sublet without requiring consent of the landlord. Any above, need formal consent.
3. Inevitably all administrative and legal cost for the landlord to consider the request (so grant or not granted) the tenant usually is required to pay for all costs.

If you do obtain consent, make sure it is clear and in writing.

Dear Jim,

This link is from Queensland Government with guide for general information on retail leasing - http://www.justice.qld.gov.au/__dat...tail-Leasing-Guidelines-Booklet_Cover_web.pdf

Agree with Sophea - Retail Shop Leases Act (QLD) 1994 is silent as to whether or not sublet is allowed. It depends on what is noted in the lease. Usually, the lease may say:

1. Require Landlord's consent and it may be granted or not granted in the landlord's absolute discretion/reasonable consent.
2. Up to a % of the premises may be sublet without requiring consent of the landlord. Any above, need formal consent.
3. Inevitably all administrative and legal cost for the landlord to consider the request (so grant or not granted) the tenant usually is required to pay for all costs.

If you do obtain consent, make sure it is clear and in writing.

Thanks, I guess my reply to Sophea and your reply nearly collided!

So I assume no one knows about retail shop tenancy agreements as they are all but extinct.

 

[Nighthelyn]

Hmmmm I must confess to be a little lost about your reference to "retail shop tenancy agreement in Qld". Like you said the document may have been under old law which I don't know about. However, currently, the law is if an agreement is for exclusive use of a piece of land and for retail purpose it is a retail lease. Even if the document is called by something else. So you will have to examine the agreement closely.

In any case, the issue of subletting is unregulated in the law and likely it is to be negotiated between you and the landlord.

Hope it helps.

-Nighthelyn

 

[JimQ]

Hmmmm I must confess to be a little lost about your reference to "retail shop tenancy agreement in Qld". Like you said the document may have been under old law which I don't know about. However, currently, the law is if an agreement is for exclusive use of a piece of land and for retail purpose it is a retail lease. Even if the document is called by something else. So you will have to examine the agreement closely.

In any case, the issue of subletting is unregulated in the law and likely it is to be negotiated between you and the landlord.

Hope it helps.

-Nighthelyn

Thanks. But from what you are stating there seems to be no real clarity as to when and how such agreements came to an end as there is no mention of them in legislation like the leases act of 1994. Is it not normal for such acts to have some sort of predecessor?

 

[Sarah J]

Essentially, your tenancy agreement is a private contract between yourself and the lessor. Statutory legislation is only there to protect the interests of certain parties in certain situations. These situations tend to be those that are most vulnerable to abuse/mismanagement. Statute does not regulate all variations of lessor/lessee relationships. Where the statutory law is silent on a lessor/lessee relationship, the ordinary rules of contract law govern.

Therefore, look at you tenancy agreement and see if there is a restrictive covenant that prevents you from subletting without the notice of the lessor. Even if there isn't such a covenant, given that you, and only you, are allowed to occupy and use the premises under the lessor's permission, the third party to whom you're subletting, may not have the same right to use and occupy. Hence, the lessor may have the right to evict the third party out. In this case, the third party will have a contractual claim against you. Therefore, it is best to obtain the lessor's permission and get signed written consent before you go ahead and sublet.

 

[JimQ]

Essentially, your tenancy agreement is a private contract between yourself and the lessor. Statutory legislation is only there to protect the interests of certain parties in certain situations. These situations tend to be those that are most vulnerable to abuse/mismanagement. Statute does not regulate all variations of lessor/lessee relationships. Where the statutory law is silent on a lessor/lessee relationship, the ordinary rules of contract law govern.

Therefore, look at you tenancy agreement and see if there is a restrictive covenant that prevents you from subletting without the notice of the lessor. Even if there isn't such a covenant, given that you, and only you, are allowed to occupy and use the premises under the lessor's permission, the third party to whom you're subletting, may not have the same right to use and occupy. Hence, the lessor may have the right to evict the third party out. In this case, the third party will have a contractual claim against you. Therefore, it is best to obtain the lessor's permission and get signed written consent before you go ahead and sublet.

The lessor being successful in evicting the third party sounds like a bit of a stretch to me as sublets really is no more than a trader selling a product. Plus, major stores sublet regularly. Indeed, it could be argued retailers such as Coles and Woolworths sublet when they sell self space to suppliers. So I believe that unless a specific clause was in the agreement the onus of proof on the lessor is steep.

 

[Sarah J]

Hi JimQ,

Again, it depends on the wording of your tenancy agreement and your rights and obligations under that agreement.

Out of curiosity, have you taken a look at the Retail Shop Leases Act 1994 (Qld) which sets out the minimum standards for retail shop tenancies in Qld? I believe this may be what you are looking for?

There is an information booklet on the legislation, specifically aimed at retail shop tenancies published by the Qld Justice Department: Essential Information About Leasing Retail Shops.