Assessing the long term viability of leasehold rural land in Queensland

Rural land holdings in a number of states in Australia can be freehold or leasehold. The actual type and tenure of the leasehold varies according to each state, but the underlying principles of ownership, transferability and farming and grazing rights are reasonably similar. There are rural areas that are all leasehold title such as the western lands in NSW, while rural land in some states and areas can be a mix of both freehold and lease hold rural property. Over the years many rural farming areas that were originally developed or granted as leasehold land have been converted to freehold title. In many instances the cost of purchasing perpetual leasehold property is similar to the equivalent freehold property despite the fact that an additional rental charge is applied to this form of ownership. Many of the current leasehold rural holdings are located in the more arid regions of the state and the prevailing agricultural farming system is either cattle or sheep grazing.

Exit strategies for business tenants

Many businesses in the UK occupy premises on fixed term leases, which usually run for several years. During this time property requirements can change. This research critically examines the three main mechanisms by which tenants can bring their leases to an end; breaks, assignment and subletting. We examine the legal rules governing these devices and undertake an analysis of lease data and surveys. Break clauses are providing a useful exit mechanism for many tenants, but they cannot give the more general flexibility of assignment and subletting. However, change is necessary to ensure that these latter provisions provide real flexibility for tenants.

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.

Lease maturity and initial rent: is there a term structure for UK commercial property leases?

This paper investigates the relationship between lease maturity and rent in commercial property. Over the last decade market-led changes to lease structures, the threat of government intervention and the associated emergence of the Codes of Practice for commercial leases have stimulated growing interest in pricing of commercial property leases. Seminal work by Grenadier (1995) derived a set of hypotheses about the pricing of different lease lengths in different market conditions. Whilst there is a compelling theoretical case for and a strong intuitive expectation of differential pricing of different lease maturities, to date the empirical evidence is inconclusive. Two Swedish studies have found mixed results (Gunnelin and Soderbergh 2003 and Englund et al 2003). In only half the cases is the null hypothesis that lease length has no effect rejected. In the UK, Crosby et al (2003) report counterintuitive results. In some markets, they find that short lease terms are associated with low rents, whilst in others they are associated with high rents. Drawing upon a substantial database of commercial lettings in central London (West End and City of London) over the last decade, we investigate the relationship between rent and lease maturity. In particular, we test whether a building quality variable omitted in previous studies provides empirical results that are more consistent with the theoretical and intuitive a priori expectations. It is found that initial leases rates are upward sloping with the lease term and that this relationship is constant over time.

Leases; percentage, short and long term

First published in 1921 under title: Long term land leaseholds.

Incentivising tenants to stay the term – will clawbacks be enforceable?

Incentives are commonly offered by commercial landlords to tenants in the form of short term rent deductions or contributions to the tenant’s fitout. Usually these incentives are conditional upon the lessee remaining in the premises for the term of the lease with an obligation on the tenant to repay a proportion of the fitout contribution and rent deductions upon early termination or assignment. While the enforceability of clawback provisions has always been unclear, there was commercial benefit to landlords in maintaining high rentals on the face of the lease and attracting good quality tenants through fitout contributions. The use of clawback provisions as part of these incentives was recently analysed by the Queensland Supreme Court through the lens of the penalties doctrine in GWC Property Group Pty Ltd v Higginson & Ors [2014] QSC 264, with a negative outcome for the landlord. Unless the decision is overturned on appeal, the salient message for landlords is that repayment of incentives for any reason, not just a breach of the lease, is unlikely to be enforceable.

Perpetually renewable leases:a reappraisal

Analyses cases involving the construction of perpetually renewable leases (PRLs) under the Law of Property Act 1922 s.145 and Sch.15, and the findings of a study into whether the relevant provisions should be repealed. Reviews the problems arising where courts have allowed a perpetually renewable term to be created, the need for an express covenant for renewal and the scope for a human rights challenge to PRLs. Outlines the arguments supporting legislative prohibition of perpetual renewals