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Leases

NSW

This publication guides practitioners through the negotiation and drafting of leases in New South Wales, including provisions for subleasing, assignment, and termination.

4 Matter Plans

Overview

The Leases commentaries cover the key practical issues of leasing, including negotiation, drafting, registration, renewals, assignments, subleases, termination, common disputes, and remedies.

The Retirement Villages commentary covers standard contracts and mandatory documents, duties, taxes and rates, commencing and ending a residency, termination of contracts and dispute resolution.

The Reference materials folder includes guidance on electronic signing and remote witnessing, and the Getting the matter underway folder contains essential compliance and client engagement documents. The comprehensive Retainer Instructions ensure that all necessary information is gathered from the client at the outset of the matter.

Also included is 1001 Conveyancing Answers (NSW), which is a useful reference guide.

Precedents in this publication include:

  • Agreements to lease;
  • Deeds of lease;
  • Library of additional clauses for the lease;
  • Library of notices for various situations;
  • Deeds of variation, amendment and assignment.
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4 Matter Plans Included

  • Item icon ALERTS - Nil
  • Item icon Full Commentary - Leases (NSW) - Acting for the Lessor
  • Folder icon Reference materials
    • Item icon AI Prompts
      An AI prompt defines a specific task for AI to perform, like drafting a particular document, and provides clear instructions on how to execute that task. The goal is for the AI to quickly create a useful first draft of a document, which the user verifies and refines into a final version, ultimately ...

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    • Item icon Looking to the Future
    • Item icon Electronic Signing and Witnessing
    • Item icon A Brief Explanation of the Transition to E-Conveyancing
    • Item icon 1001 Conveyancing Answers (NSW)
    • Item icon 101 Costs Answers
    • Folder icon Papers and articles - Conveyancing and property
      • Item icon Plain language – A paper by the Hon. Michael Kirby AC CMG
      • Item icon Adjustment for cladding agreements
      • Item icon Adjustment of rates
      • Item icon Adjustment of rent
      • Item icon Adjustments
      • Item icon Adjustments and land tax in 2024
      • Item icon Agreement to lease
      • Item icon Avoiding off the plan - Quality defects
      • Item icon Avoiding off the plan - Statutory rights
      • Item icon Avoiding off the plan contracts - A sequel
      • Item icon Bits and pieces
      • Item icon Breach of contract - Penalty interest
      • Item icon Breach of contract – Reasonably foreseeable loss
      • Item icon Breach of section 32
      • Item icon Caveats (Vic)
      • Item icon Caveats - Forcible removal 1
      • Item icon Caveats - Forcible removal 2
      • Item icon Caveats - Insufficient proceeds from settlement
      • Item icon Caveats - Tenant’s caveats and the sale or mortgaging of freehold property
      • Item icon Caveats - Use them!
      • Item icon Costs and caveats
      • Item icon Certificates of title in electronic conveyancing
      • Item icon Clayton's settlement
      • Item icon Compensation for loss
      • Item icon Contamination
      • Item icon Contract – Australian Consumer Law – Impact on residential conveyancing
      • Item icon Contract - Avoiding off the plan contracts 1
      • Item icon Contract - Avoiding off the plan contracts 2
      • Item icon Contract - Changing the contract by special condition
      • Item icon Contract - Electronic conveyancing special condition
      • Item icon Contract - Electronic signatures
      • Item icon Contract - Entire contract
      • Item icon Contract - Guarantee
      • Item icon Contract - Is there a contract?
      • Item icon Contract - Misleading contracts
      • Item icon Contract - New contract
      • Item icon Contract - New contract - Contract of sale tweaked
      • Item icon Contract - New contract - Happy anniversary
      • Item icon Contract - New special conditions for contract of sale
      • Item icon Contract - Nomination
      • Item icon Contract - Terms contracts 1
      • Item icon Contract - Terms contracts 2
      • Item icon Contract - Terms contracts 3
      • Item icon Contract - Trust transactions
      • Item icon Cooling off
      • Item icon Co-owners - Joint tenancy or tenancy in common
      • Item icon Co-owners and easements – Two topics
      • Item icon Covenant - Removal of covenants 1
      • Item icon Covenant - Removal of covenants 2
      • Item icon Defects - Essential safety measures - Part 1
      • Item icon Defects - Essential safety measures - Part 2
      • Item icon Defects - Occupancy and insurance certificates
      • Item icon Deposit - Deposit release - 2010
      • Item icon Deposit - Deposit release - 2017
      • Item icon Deposit - Deposit release - A solution?
      • Item icon Deposit - Deposit release - Tough decisions?
      • Item icon Deposit - Deposit release - Why take the risk?
      • Item icon Deposit - Forfeiture of deposit
      • Item icon De-regulated Contract of Sale of Land
      • Item icon Deterioration - A matter of degree
      • Item icon Deterioration - General condition 24 has teeth
      • Item icon Deterioration - State of the premises
      • Item icon Disclosure of death
      • Item icon Estate agent - Agent beware
      • Item icon Estate agent’s commission – Money for nothing
      • Item icon Foreign residents capital gains tax withholding
      • Item icon GST - GST and mistake
      • Item icon GST - Margin scheme
      • Item icon GST withholding
      • Item icon Inadvertent disclosure
      • Item icon Inspection - Right to inspect
      • Item icon Land tax - Part 1
      • Item icon Land tax - Part 2
      • Item icon Land transfer duty benefits
      • Item icon Lease - Abandoned goods
      • Item icon Lease - Landlords beware
      • Item icon Lease - Retail lease
      • Item icon Lease - Retail lease - Predominant use
      • Item icon Lease - Retail lease cost
      • Item icon Lost trust deeds
      • Item icon Material facts
      • Item icon Measurements
      • Item icon Mortgage stress
      • Item icon Nomination
      • Item icon Nomination and the Australian Consumer Law
      • Item icon Nomination disputes
      • Item icon Notice of action
      • Item icon Notices - Liability for notices
      • Item icon Off the plan duty concessions
      • Item icon Owner-builder insurance
      • Item icon Owner-builders
      • Item icon Owners corporations
      • Item icon Personal Property Securities Act
      • Item icon Planning certificates - Accuracy
      • Item icon Power of attorney
      • Item icon Priority notice
      • Item icon Property - Rules and undertakings
      • Item icon Rescission - Consequences of rescission 1
      • Item icon Rescission - Consequences of rescission 2
      • Item icon Rescission - Costs on rescission
      • Item icon Retail lease outgoings
      • Item icon Retail premises
      • Item icon Retail repairs
      • Item icon Retail repairs revisited
      • Item icon Sale of land amendments
      • Item icon Scary short-stays
      • Item icon Self managed superannuation funds
      • Item icon Septic situation
      • Item icon Sheriff - Enforcement procedure
      • Item icon Sheriff's sale - Part 1
      • Item icon Sheriff's sale - Part 2
      • Item icon Solicitor - Lawyers selling real estate
      • Item icon Solicitor – Executor’s commission 1 – Horns of a dilemma
      • Item icon Solicitor - Executor's commission 2 - A fiduciary duty
      • Item icon Solicitor – Liability for commercial advice
      • Item icon Stamp duty concessions
      • Item icon Subdivision - Off the plan sales
      • Item icon Subdivision - Off the plan sales - Best endeavours - Part 1
      • Item icon Subdivision - Off the plan sales - Best endeavours - Part 2
      • Item icon Subdivision - Off the plan sales - Materially affects
      • Item icon Subdivision - Off the plan sales - Sunset conditions
      • Item icon Subdivision - Owners corporation certificates
      • Item icon Subdivision - Owners corporation repairs
      • Item icon Subdivision - Owners corporations
      • Item icon Subject to contract
      • Item icon Sunset clause – Vendor ending a contract – Purchaser’s consent or court order required
      • Item icon Time of the essence
      • Item icon To be or not to Airbnb
      • Item icon Trade practices – Fair trading in property transactions
      • Item icon Vendor statement - Aboriginal Heritage Act
      • Item icon Vendor statement - Breach of section 32
      • Item icon Vendor statement - Growth areas infrastructure contribution
      • Item icon Vendor statement - Honest and reasonable
      • Item icon Vendor statement and leases
      • Item icon Vendor statement review
      • Item icon Vendor statements and the Australian Consumer Law
      • Item icon Vendor's duty to co-operate
      • Item icon Wills and estates - Death in the house
    • Item icon Further information
  • Item icon Overview
    The owner of real estate may create a lesser estate in their property by granting a leasehold interest, giving the lessee the right to use and enjoy the property to the exclusion of the entire world, including the owner. The leasehold estate is subject to the owner’s reversionary interest at the ...

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  • Folder icon A. Getting the matter underway
    • Item icon File cover sheet - Leases
    • Item icon To do list - Leases
    • Item icon First steps
    • Item icon Client details and verifying identity
    • Item icon Retainer instructions - Leases
    • Item icon Conflict of interest check
    • Item icon Initial letter to lessor with costs disclosure
    • Item icon Costs agreement - NSW
    • Item icon Scope of work - Leases - Acting for the lessor
    • Item icon Standard costs disclosure form for clients - Fees under $3000
    • Item icon Conveyancers costs disclosure - NSW
    • Item icon Time and costs estimates
    • Folder icon If required - Updating costs disclosure
      • Item icon Letter to client updating costs disclosure
      • Item icon Charge securing costs
      • Item icon Guarantee securing costs
      • Folder icon Costs disclosure before settlement in litigation matters
        • Item icon Letter to client - Costs disclosure before settlement - NSW, VIC, and WA
        • Item icon Letter to client - Costs disclosure before settlement - QLD, SA, TAS, ACT, and NT
    • Folder icon If required - Agent
      • Item icon Initial letter to agent
    • Item icon Electronic conveyancing
      Client Authorisation A client authorisation enables the client to authorise a solicitor or conveyancer to act on their behalf for an electronic transaction. Although the authorisation is similar to a power of attorney, legislation specifically states a client authorisation is not a power of ...

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    • Folder icon Verification of identity and client authorisation
      • Item icon Verification of identity in electronic conveyancing transactions
      • Folder icon Library of identity and authorisation forms - NSW
        • Item icon Verification of identity certificate
        • Item icon Client authorisation
        • Item icon Identifier declaration
        • Item icon Identity agent certification
        • Item icon Australian Embassy/High Commission/Consulate certification form
    • Folder icon General deeds, agreements, execution clauses, and statutory declarations
      • Item icon Deeds and Agreements
      • Folder icon Deeds
        • Item icon Deed for general use
        • Item icon Deed of guarantee
        • Item icon Deed of release
        • Item icon General deed of indemnity
        • Item icon Deed of assignment of agreement
        • Item icon Deed of gift
        • Folder icon Library of standard clauses for deeds
          • Item icon Amendment
          • Item icon Confidentiality for defined information - All parties
          • Item icon Confidentiality for defined information - One party
          • Item icon Confidentiality for terms of deed - All parties
          • Item icon Confidentiality for terms of deed - One party
          • Item icon Costs
          • Item icon Counterparts
          • Item icon Dispute resolution
          • Item icon Events beyond control
          • Item icon Governing law and jurisdiction
          • Item icon Interpretation
          • Item icon No assignment
          • Item icon Notices
          • Item icon Severance
          • Item icon Waiver
          • Item icon Whole agreement
      • Folder icon Agreements
        • Item icon Agreement for general use
        • Item icon Heads of agreement
        • Item icon Non-disclosure agreement - Formal
        • Item icon Non-disclosure agreement - Informal
        • Folder icon Library of standard clauses for agreements
          • Item icon Amendment
          • Item icon Confidentiality for defined information - All parties
          • Item icon Confidentiality for defined information - One party
          • Item icon Confidentiality for terms of agreement - All parties
          • Item icon Confidentiality for terms of agreement - One party
          • Item icon Costs
          • Item icon Counterparts
          • Item icon Dispute resolution
          • Item icon Events beyond control
          • Item icon Governing law and jurisdiction
          • Item icon Interpretation
          • Item icon No assignment
          • Item icon Notices
          • Item icon Severance
          • Item icon Waiver
          • Item icon Whole agreement
      • Folder icon Execution clauses
        • Folder icon Library of execution clauses for agreements
          • Item icon Attorney
          • Item icon Authorised officer
          • Item icon Company
          • Item icon Company - Sole director
          • Item icon Individual
          • Item icon Individual - No witness
        • Folder icon Library of execution clauses for deeds
          • Item icon Attorney
          • Item icon Authorised officer
          • Item icon Company
          • Item icon Company - Sole director
          • Item icon Individual
      • Folder icon Statutory declarations
        • Item icon Commonwealth statutory declaration
        • Item icon Statutory declaration - blank - ACT
        • Item icon Statutory declaration - blank - NSW
        • Item icon Statutory declaration - blank - VIC
        • Item icon Statutory declaration - blank - QLD
        • Item icon Statutory declaration - blank - TAS
        • Item icon Statutory declaration - blank - SA
        • Item icon Statutory declaration - blank - WA
        • Item icon Statutory declaration - blank - NT
        • Item icon Standard annexure note for documents
      • Item icon Standard annexure note for documents
  • Folder icon B. Retail lease - Disclosure statements
    • Item icon Disclosure statements for retail leases
      Consumer protection requires information. Lessees are more likely to make a good decision if they are given all relevant information.

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    • Item icon Lessor's Disclosure Statement
    • Item icon Assignor's Disclosure Statement
    • Item icon NSW Retail Tenancy Guide 2020 - NSW Small Business Commissioner
  • Folder icon C. If required - Agreement to lease
    • Item icon Agreement to lease
      An agreement to lease, offer to lease, and intention to lease are all terms used to describe a document recording an agreement to enter into a lease. A claim in equity may result in the court enforcing an agreement to lease as the lease if it contains sufficient details of the essential terms, such ...

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    • Item icon Agreement to lease - General
    • Item icon Agreement to lease - Major construction
  • Folder icon D. The lease
    • Item icon Initial considerations
      Some important initial considerations for a lease are:

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    • Item icon The components of a lease
      Parties The lease must include the lessor's and lessee's full legal names. Any guarantors are also noted.

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    • Item icon Electronic lease and lodgement
      All land dealings must be lodged with the NSW Land Registry Services electronically by a subscriber to an Electronic Lodgment Network Operator (ELNO) such as Property Exchange Australia (PEXA) or Sympli. See the NSW Land Registry Services guide on electronic leases and the Registrar General’s ...

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    • Item icon Retail leases
      Consumer protection has dominated the development of the law. Of particular concern was the relationship between a lessor and a lessee of retail premises. With the development of shopping malls, ownership of retail premises became concentrated in the hands of a small group of lessors who used their ...

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    • Item icon Lease
    • Item icon Lease - Retail - Annexures A and B
    • Item icon Lease - Commercial industrial - Annexures A and B
    • Item icon Lease - Rural - Annexures A and B
    • Folder icon Library of clauses
      • Item icon Annexure with execution clauses
      • Item icon Covenants protecting mortgagee's interests clause
      • Item icon Demolition and relocation clause
      • Item icon First right of refusal clause
      • Item icon Liquor licence - Application clause
      • Item icon Liquor licence - Lessor's consent clause
      • Item icon Liquor licence - Transfer clause
      • Item icon Option to purchase clause
      • Item icon Turnover rent clause
    • Item icon Letter to lessor with draft lease and advice
    • Item icon Enclosure - Advice to parties reviewing a lease
    • Item icon Letter to lessee's solicitor submitting retail lease sublease
    • Item icon Letter to lessee's solicitor submitting commercial industrial lease sublease
    • Item icon Letter to lessee's solicitor submitting lease sublease
    • Item icon Letter to lessee acting for self submitting retail lease sublease
    • Item icon Letter to lessee acting for self submitting commercial industrial lease sublease
    • Item icon Letter to lessee acting for self submitting lease sublease
    • Item icon Letter to lessor with leases to sign
    • Folder icon Other leases and agreements
      • Item icon Licence to occupy premises
      • Item icon Car parking licence agreement
      • Item icon Deed of lease of business
      • Item icon Sharefarming agreement
      • Item icon Medical centre licence agreement
      • Item icon Short licence agreement of business and premises
      • Item icon Old system lease first page before standard annexure
    • Folder icon If required - Residential tenancies
      • Item icon Residential tenancy agreement
  • Folder icon E. If required - Rent reviews and variation
    • Item icon Rent reviews
      Most leases include a rent review clause that provides for rent to be reviewed during the lease term. Renewal usually triggers a rent review. Without a review clause in the lease, rent may remain the same throughout the term and, depending on the option clause, possibly even for a further term.

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    • Item icon Letter to lessee for CPI rent increase
    • Folder icon Variation
      • Item icon Letter to lessee's solicitor submitting variation
      • Item icon Example content - Annexure to the variation of lease
      • Item icon Letter to client enclosing variation of lease for execution
      • Item icon Letter to client confirming registration of variation of lease
      • Item icon Deed of amendment - Unregistered lease
      • Item icon Deed of variation of lease - Deferral of rental payments
      • Item icon Deed of variation of lease - Deferral of rental payments during COVID-19
  • Folder icon F. If required - Sublease and assignment
    • Item icon Change of parties
      A lease fundamentally is a contract to which the normal rules of privity of contract apply. However, rights arising under property law mean a lease may affect parties other than the parties to the original contract. Those property rights may be enforceable against third parties, such as the ...

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    • Folder icon Sublease
      • Item icon Sublease
        A sublease is a contract between the lessee and a new lessee, also called a sublessee. The sublease must have a termination date that is earlier than the termination date in the original lease of the premises, called the head lease. The sublease mirrors the terms of the head lease except for the ...

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      • Item icon Letter to lessee's solicitor submitting lease sublease
      • Item icon Sublease
      • Item icon Sublease - Retail - Annexures A and B
      • Item icon Sublease - Commercial industrial - Annexures A and B
      • Item icon Sublease - Rural - Annexures A and B
    • Folder icon Assignment/Transfer
      • Item icon Assignment
        An assignment acts as a transfer of the lease, it transfers all the lessee's interest in the premises under the lease to a new lessee. The original lessee is the assignor, and the proposed new lessee is the assignee. The assignor cannot reclaim their interest in the premises.

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      • Item icon Assignment – Retail lease
        Lessor’s consent to assignment – Retail lease Under s 39 of the Retail Leases Act 1994, a lessor can withhold consent to the assignment of a lease only if:

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      • Item icon Assignor's Disclosure Statement
      • Item icon Deed of assignment of lease
      • Item icon Letter to assignor's solicitor enclosing assignment
      • Item icon Letter to assignee's solicitor enclosing copy of documents
      • Item icon Letter to client enclosing assignment documents for execution
      • Item icon Letter to assignee's solicitor enclosing completed assignment
      • Item icon Letter to assignor's solicitor enclosing completed assignment
      • Item icon Letter to client enclosing completed assignment documents
  • Folder icon G. If required - Notices, disputes and termination
    • Item icon Repairs, alterations and interference
      Obligations to repair The lease sets out the obligations of the lessor and the lessee concerning specific types of repairs to the leased premises.

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    • Item icon Disputes and termination
      Common disputes See also Repairs, alterations and interference.

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    • Item icon Notice of exercise of option
    • Item icon Notice to remedy breach of lease
    • Item icon Notice of termination and to quit
    • Item icon Notice of termination
    • Item icon Notice of termination of periodic tenancy
    • Item icon Relocation notice
    • Item icon Termination notice following relocation notice
    • Item icon Termination notice for demolition
    • Folder icon Surrender
      • Item icon Surrender of lease
        Either party may wish to end the lease before its term expires for many reasons. If the parties mutually agree, the lease may be terminated at any time, with or without conditions. Leases may also be surrendered by operation of law.

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      • Item icon Letter to lessee's solicitor submitting surrender
      • Item icon Surrender of lease
      • Item icon Old system surrender of lease
      • Item icon Deed of surrender of lease
      • Item icon Letter to client enclosing surrender of lease for execution
      • Item icon Letter to client confirming registration of surrender of lease
    • Folder icon Statutory declarations
      • Item icon Statutory declaration - blank - NSW
      • Item icon Clause - Statutory declaration of solicitor - Request to cancel lease on default or expiry
      • Item icon Clause - Statutory declaration of lessor lease expired without option exercise
      • Item icon Request
  • Folder icon H. Registration and costs
    • Item icon Registration and costs
      Registration requirement A lease for a term of more than 3 years must be registered to create an interest in the land. The term of a lease includes options to renew. An unregistered lease creates an equitable interest only.

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    • Folder icon Mortgagee
      • Item icon Mortgagee bound by the lease
        Mortgage registered before the lease registered Unless the mortgagee's consent to the lease is obtained, the lease does not bind the mortgagee: s 53(4) Real Property Act 1900.

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      • Item icon Letter to mortgagee for consent to mortgage of lease
      • Item icon Letter to mortgagee for consent to lease
    • Folder icon Revenue NSW
      • Item icon Transfer duty
        Leases or variations of leases executed on or after 1 January 2008 do not incur transfer duty. This includes variations that increase a lease’s cost base. However, transfer duty remains payable on some lease transactions, such as:

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      • Item icon eDuties portal – RevenueNSW
  • Folder icon I. Finalising the matter
    • Item icon Finalising the matter
      Leasing is generally straightforward as the parties both want to get the lease finalised in a timely manner. However, delays in signing the lease and paying costs and registration fees can occur when:

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    • Folder icon If required - Bonds and guarantees
      • Item icon Letter to Retail Tenancy Unit lodging bond
      • Item icon Retail bond lodgement
      • Item icon Claim for retail bond money
      • Item icon Retail lease basics - NSW Small Business Commissioner
      • Item icon Section 22 or Section 46 Notice - Notice of Interest, Lease or Mortgage
    • Item icon Letter to lessee's solicitor with confirmation of registration
    • Item icon Letter to client finalising the matter
    • Item icon Example invoice incorporating notification of client's rights - NSW
    • Item icon Invoice recital - Leases
    • Item icon Closing the file
    • Item icon File closing checklist
  • Item icon Comments and suggestions for By Lawyers

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