The registration of a lease (retail or commercial) involves recording the tenant’s interest in the property under the terms of the lease on the title to the property. This can protect the tenant’s interest from a competing interest.

Does a Commercial Lease Have to be Registered?

A retail or commercial lease should be registered in the ACT if:

  • it is for a term of more than 3 years or
  • it grants the tenant a right to purchase the premises or the land or
  • it grants the tenant the right of renewal of the lease, also known as an option for a further term.

If the unregistered lease is for a term of 3 years of less then the tenant’s interest in the initial term of the lease may be protected but the tenant risks losing its right to purchase the premises or renew the Lease.

In NSW, a retail or commercial lease should be registered if:

  • it is for a term of more than 3 years or
  • the initial term and any options added together exceeds 3 years.

If the lease is covered by the Retail Leases Act 1994 (NSW), the landlord is required to register the lease if it is 3 years or more within 3 months after it has been signed and returned to the landlord.

What are the risks if a lease is not registered?

For tenants, the most common risks regarding unregistered leases can arise if the landlord sells the property or if the landlord’s mortgagee takes possession of the property.

If a landlord sells the property and the buyer is not aware of the unregistered lease, then the buyer could refuse to comply with the lease and may be able to evict the tenant.

This presumption does not apply if the purchaser has been given notice of the tenancy. It is usual practice when selling to notify the buyer of all tenancies and any diligent purchaser would inspect a property before purchasing and should be then made aware of a tenant in possession of the premises. However, given that registration is a relatively inexpensive process it is the tenant’s best option to avoid any potential argument or risk.

If a mortgagee has a registered mortgage over the title, the mortgagee or bank is not obligated to recognise the tenant’s right to occupy the property unless they have consented to the lease before it was registered.

How to register a lease?

Currently in the ACT leases are lodged for registration in hard copy at Access Canberra. In NSW, the landlord must instruct a solicitor or conveyancer to complete an electronic lodgement of lease on PEXA or another electronic platform for registration with the NSW Land Registry Services.

Both ACT and NSW have strict requirements regarding identity and authority to lodge documents for registration, as well as strict requirements for the lease to be considered to be in registrable form. Relevant consents, for example for any mortgagee, must also be obtained prior to lodging for registration. We recommend engaging a solicitor to assist with the registration of a lease to ensure you get it right.

Other leasing transactions, such as a variation, surrender, or transfer of lease may also require registration. We recommend engaging a solicitor to assist with these leasing transactions to consider if the transaction needs to registered on the title.

MV Law Canberra

Ph: (02) 6279 4444

Email: info@mvlaw.com.au