The implication of a term of good faith in commercial leases

Much has been written in the past decade on the subject of the implication of a term of good faith in contracts in Australia, particularly since the judgment Priestley JA in Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234. Except for an early article by Rachael Mulheron, 'Good Faith and Commercial Leases: New Opportunities for the Tenant' (1996) 4 APLJ 223, very little else has been written with respect to the possible application of the doctrine to the commercial leases.With the advent of two later New South Wales Supreme Court decisions Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 and, more recently, Advance Fitness v Bondi Diggers [1999] NSWSC 264, the question of the application of the doctrine in the commercial leasing context has been examined. This article briefly considers the nature and substance of the doctrine against the background of the relationship of lessor and lessee and examines in some depth the Australian decisions on commercial leases where it has been sought, unsuccessfully, to apply the doctrine. The article concludes by suggesting that as a standard commercial lease usually covers the field of agreement between lessor and lessee and as a lessee has a high degree of statutory protection derived from equitable principles, there may be little room for the operation of the doctrine in this legal environment.

The implication of a term of good faith in commercial leases — A brief response

By way of response to Professor Duncan's article,1 this article examines the theoretical basis for the implication of contractual terms, particularly the implication of a term at law. In this regard the recent decision of Barrett J in Overlook v Foxtel [2002] NSWSC 17 is considered, to the extent that it provides guidance concerning the implication of an obligation of good faith in the context of a commercial contract. A number of observations are made which may be considered likely to have application to the relationship of commercial landlord and tenant. The conclusion reached is that although the commercial landlord and tenant contractual relationship is highly regulated, this may not deny a remedy to a tenant who is the victim of a landlord's 'bad faith'. Finally, the article concludes by considering the extent to which it may be possible to contractually exclude the implied obligation of good faith.

Green leases : becoming a reality

Only a few years ago there were only a handful of buildings in Australia, mainly leased by or from the Commonwealth Government to which a green lease might have application. Now with the passing of the Building Energy Efficiency Disclosure Act 2010 (Cth) all commercial office premises in excess of 2000 square metres have 12 months from 1 November 2010 to obtain a Building Energy Efficiency Certificate as part of Stage 1 of the Federal Government’s National Framework for Energy Efficiency This significant change has focused attention on changes required to the conditions of leases where the building has a NABERS rating. This article considers material from the United Kingdom, the United States and Canada where there are similar policy changes in play and makes suggestions as to how certain clauses of a standard lease of a commercial office block may be altered to meet this new regime.

Commercial and retail leases in Australia Online [6th ed.]

"Authored by well-established leasing experts including Professor WD Duncan, author of the book Commercial Leases in Australia (6th ed), this loose leaf and online service offers a variety of resources to save solicitors and barristers time when negotiating or disputing commercial leasing matters at home and across the country. This is the only work to offer annotated retail leasing legislation for the three main States, including discussion of tribunal decisions and links directly to equivalent provisions in all other jurisdictions. A comparative table highlights key differences and similarities in retail leasing legislation between all States at a glance. Solicitors are then able to draw upon deeper treatment of commercial leasing in all States in principles-based commentary, and access precedents that are readily adaptable for other jurisdictions." -- publisher website

Commercial Leases in Australia [7th ed.]

Commercial Leases in Australia is a comprehensive guide to understanding and drafting commercial leases agreements in Australia and to managing disputes when they arise.

The effect of ground leases on house prices in Helsinki

One imperfection in housing markets is imperfect knowledge about legal interests such as ground leases. Both actual reduced legal interest as well as uncertainty surrounding rights and future lease payments for houses constructed on leased land may affect prices relative to houses built on freehold land. We use regression analysis of sales prices of condominium transactions in Helsinki to examine the effect ground leases have on house prices. We find that prices on condominiums constructed on leased lots are discounted at least 5 %, on average. In addition, we see that the announcement of potentially large increases in base rents upon renewal contributes to the discount.

Assignments of non-retail commercial leases: Some contentious issues

Assignment clauses in non-retail commercial leases are as infinitely varied as the circumstances in which disputes arise. Each clause must be individually interpreted as part of the lease in which it is embedded. Whilst the assignment of a lease is one of the most commonplace transactions between lessor and lessee, the case law reveals few unifying principles. This article seeks to cautiously identify a set of principles which should be in the mind of any lawyer when a dispute relating to an assignment arises. It concludes with a short checklist of matters which must be considered by such a person to encourage the application of principles in the first instance towards a resolution of the dispute.

Contractual termination of leases: lessons from the Commonwealth: Pt. 1

This, the first part of a three-part article on contractual termination of leases, considers the extent to which determination of a lease in accordance with the contract law principles of frustration and acceptance of a repudiatory breach has been accepted by Commonwealth courts. Reviews the approaches adopted by the courts in Canada, the US and Australia to the application of contractual principles to landlord and tenant disputes.

Options to renew leases: time for legislative relief?

Argues that England should follow the example of Australia and New Zealand and give the courts statutory power to grant a tenant relief against forfeiture of the right to exercise an option to renew a lease by reason of the tenant being in breach of covenant. Suggests the legislative provision introducing this power should adopt wording mirroring that in the Law of Property Act 1925 s.146(2).

Contractual termination of leases: lessons from the Commonwealth: Pt. 2

This, the second part of a three-part article on contractual termination of leases, considers the extent to which English courts have allowed the contract law principles of frustration and acceptance of a repudiatory breach to be applied to leaseholds. Distinguishes cases involving a repudiatory breach by a landlord from those where the tenant is the one in breach.

Contractual termination of leases: lessons from the Commonwealth: Pt. 3

This, the third part of a three-part article on the contractual termination of leases, examines, with reference to UK and Commonwealth case law, the connection between contractual termination and the provisions of legislation including the the Landlord and Tenant Act 1954 Pt II relating to forfeiture and termination of business tenancies. Considers why contractual termination by acceptance of a repudiatory breach is a necessary development to protect tenants in the event of a landlord's significant default.