31/1/08
The global liquidity
squeeze has reinforced the need for small business tenants to preserve and
protect their leasehold rights.
Small Business
Minister Margaret Quirk said many small businesses risked losing thousands of
dollars when a new landlord took over a shopping centre.
A simple caveat in their lease agreement would protect them.
“If a small business has a retail shop lease
exceeding five years, particularly in a shopping centre, the owners should seek
urgent legal advice as to whether lodging a subject to claim caveat is the
appropriate action,” Ms Quirk said.
According to
the Small Business Development Corporation (SBDC) a ‘subject to claim caveat’ is
different from an absolute caveat which most retail lease agreements
disallow.
The Minister said it was advisable that
caveat documents were prepared and lodged by a solicitor.
“If the shopping centre is sold and the lease which exceeds five
years is not protected by caveat, it is possible that the new owner will not
have to honour the lease,” she said.
“Tenants
with existing shopping centre leases for five-year terms with no further options to renew
are unlikely to be affected by a change in ownership, particularly if it is the
first five years of occupancy under a new retail shops
lease.”
Most retail leases in Western Australia
were regulated by the Commercial Tenancy (Retail Shops) Agreements Act
1985.
The SBDC provides free guidance to
landlords and tenants on their rights and obligations and receives in excess of
2,600 retail tenancy inquiries per year.
For
further information, or to order
a copy of SBDC’s latest publication ‘How to negotiate your way to a better
retail lease’, contact an SBDC commercial tenancy adviser on 131 BIZ (131
259).
Minister's office - 9213 7000
