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Welcome to The OMB Law Board, the podcast where legal insights meet practical advice. Hosted by Simon Bennett, Managing Partner at OMB Solicitors, this show delves into what you can expect when engaging with OMB Solicitors. Specialising in property law and commercial law, OMB also boasts dedicated teams for estate planning, contested estates, body corporate matters, litigation, and family law.
Each episode features in-depth discussions led by experienced team leaders, some with over 20 years of expertise. You'll gain valuable knowledge on initial consultations, cost assessments, timelines, and the importance of clear communication and confidentiality in legal matters.
Join us to break down barriers and navigate your legal journey with confidence. Tune in for expert advice, client stories, and tips on how to prepare for your legal needs. The OMB Law Board is your trusted source for all things legal.
(upbeat music) Hi there, and welcome back to the OMB Law Board. I'm Simon from OMB Solicitors, and today I've got with me Lisa Harris from OMB, and Lisa, you've been with me 15 years working with me day in and day out.
we have a pretty good time doing it, don't we? Yes, I think we respect each other really well. Yeah. And predominantly, you helped me with a lot of my commercial stuff, and today I wanted to talk about some commercial leasing, so that our audience could get a bit of an insight as to what we go through when we do commercial leasing, because there's all different types of commercial properties, and industrial and retail properties. So when our audience thinks about leasing, they don't see all those intricacies, and I thought we might drill down on a little bit of that today, if that's okay. Sure. Okay. So when we get a lease, what's the first most important thing you're thinking about when we're drafting the documents?(...) Basically, what type of lease it is. Is it commercial, retail, a factory?(...) Because that plays the most important part of what type of lease we're actually going to do. Why is that important?
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Because they're all different. Okay. And people don't understand that, but every premises or property is different. So the way you draft your lease is different depending on what you're leasing?(...) Correct. Okay. So what's the difference between retail and commercial?(...) Commercial it's not under the Retail Shop Leases Act, which means it's pretty standard, pretty straightforward,(...) whereas if it's retail, you've got the Retail Shop Leases Act, which is lessee, disclosure statement, financial, advice reports, all of those things, and time frames. Okay. So the Retail Shop Leases Act sets a whole lot of rules and minimum standards for a lease that mightn't be covered on a normal commercial lease. That's correct, yes. Okay.
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And there's more disclosure obligations? Absolutely. So what have we got to do to disclose for that sort of lease? You have to, first of all, prepare a less or disclosure statement.
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And they're really important because the lease has to reflect what's in the less or disclosure statement. If it doesn't and something's missed, then the tenant can refer back to the lease or disclosure statement and possibly get out of the lease.(...) Okay. So now I'm hearing not only have we got minimum standards and requirements, but if we don't get certain things right in Retail Shop Leasing, there's problems for the landlord and possibly the tenant. Absolutely. Okay. And there's termination rights? Yes, there is. Okay.
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So that's right. And we need to know whether it's retail or commercial. And how do we know if it's retail or commercial?
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Well, generally, if I've got instructions, I will go on the website, search the property, Google Earth it so I can see what it actually is.
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I do a title search to determine if it's going to be a Strata lease, retail, or a whole lot.(...) Usually if it's in a shopping center, that's a given. Okay. It is retail.
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And it's important too. Is it Strata? Is it the whole of the lot or is it part of the lot? So they're all different as well. Absolutely. Yeah. Okay. So now we're getting really complicated.
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But let's think about the Retail Shop Lease for a minute because the Retail Shop Lease, as I understand it, and you always tell me every day that there's certain uses that are out and out retail. And if you have that use, you're a Retail Shop Lease Act. That's right. So what would some of those be?
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If there's a Retail Shop Lease Act, is it if it's in a shopping center or a complex? Or if it's a strip center that has five shops or more?(...) If you have five shops but three of them are not retail, then likely it's not going to be retail. The Act itself has a list of exactly what is retail and what is not.(...) But it also has, you have to work out where the premises is. Okay. So now I can see where your 15 years of experience is coming in. So we've got a list of specific businesses which are just absolute retail. And if you're one of those, you're in the Retail Shop Leases Act. But even if you're not one of those and you're in a shopping center or a strip with five or more retail businesses, you're also a retail shop, even if you're not on the list. That's correct. Okay. So now I know, well, we've got to get that right.(...) What other things come out of being a Retail Shop Lease? What about fees? That's where I think it's unfair.(...) Because the landlord has to pay our fees. The tenant doesn't have to. If it's commercial, the tenant has to pay our fees.
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With the retail leases, though, often we find that once the lease goes out to the tenant solicitors, then there's heaps of amendments. Then we have to go back to the landlord and say, look, there's extra fees. Okay. So you can't pass on, a landlord can't pass on their fees on a Retail Shop Lease, but on a commercial, industrial, et cetera, they can. That's correct. Wow. There's so many differences between these when you drill down on it.
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Tell us about, because this comes up quite a bit and I'm interested in it, and I'm sure our viewers are, where you're going to lease something that's not yet built. How do you do that? Surely you can't sign a lease for a piece of land where they haven't built the factory yet. No, you would do an agreement to lease. Okay. What's that? An agreement to lease sets out all the rules of what the lease is going to have. A lease is done as well and attached to it. So the agreement is an agreement between two parties to say that, yes, we'll build this and you will lease it and this is what it's going to entail. So that sounds like a pretty complicated document because it's going to detail what the landlord's going to build, when they're going to build it, and when they're going to hand over the premises to the tenant, and then the tenant's got to do a fit out? Yes, that's right. So there'll be a handover date and then the handover goes over and then the tenant will commence its fit out.(...) And then it depends on whether the fit out's completed as to when they commence, when the lease comes into play, which is usually when they start trading or the day after their fit out is done. Okay. So we've got the premises getting built, then we've got a fit out to be done by a tenant, and then sometime around the end of that fit out or the first day they start trading, the actual lease starts, and with these agreements, the lease is actually already attached. So once we get to that point, we don't have to negotiate again and we just get started on the lease. No, that's right. That's all done previously. So the lease comes into play and that is what it is.
So Lisa, tell me, what would your top tips be to someone who's going to instruct OMB to prepare a lease for a property that they own? What sort of information can they get together to give to us to make the process smoother
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and a little bit cheaper because we're not going to spend as much time chasing down all the details? We have a lease instruction sheet, which generally if I get an inquiry about a lease, I will send them the instruction sheet which lists out all the terms of the lease. Then I call them and run through it with them. I explain to them what retail, commercial, we run through everything with them. So they've got a fair idea. So if you're interested in protecting your property, because that's where the value in leases is, protect your property and your tenancy.
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Contact us at OMB Solicitors. Lisa can send you a lease instruction sheet, fill out all the information and get it back to us and we can get the lease prepared. What are our turnaround times?(...) Usually two days we try for. That's pretty good. We're pretty fast, yeah. Fantastic. All right. Well, Lisa, I really appreciate you taking the time talking to our audience today on the OMB Law Board. I think the information you've given us about leases,(...) agreements to lease, the Retail Shop Leases Act and the differences and why it's important to identify that information upfront has just been really valuable. So thanks for your time today and we look forward to seeing you again. Thanks.