Case Study - Property - Unfavourable Variations to a Lease

Situation:

A client owned an apartment as an investment property in Queensland.  The apartment was leased to a large serviced apartment provider.  At the end of the term of the lease, the serviced apartment provider advised the owner that it was required to enter into a new lease document on terms that were less favourable to the owner than the terms of the original lease.  Amongst other unfavourable variations, the proposed new lease contained variations relating to the responsibility of body corporate levies and also imposed a less favourable market rent review provision.  Concerned that the new lease would adversely affect the saleability and value of its property, the owner objected to the proposed lease.  However, the serviced apartment provider continued to assert that the owner must accept the terms of the proposed new lease.

Response:

After seeking advice from Moores Legal, the owner discovered that it was entitled to a renewed lease on terms similar to that of the original lease.  Moores Legal engaged in some negotiations on behalf of the owner concerning its position under the original lease.

Outcome:

Moores Legal was able to secure a renewed lease for the landlord on terms that were substantially the same as that of the original lease, thus resulting in the protection of the owner's investment.