Why register leases

The primary benefit of lease registration is statutory protection from purchasers of the property under the Real Property Act. If the landlord sells the property, and you have an unregistered lease, then the purchaser of the property could refuse to recognise your lease and either require you to vacate or to enter into a new lease on much less favourable terms.

Technically, the registration of a lease is not required and in some situations, it is not recommended such as with short term leases or where the landlord and tenant are the same but have different company structures. However, registering a lease is highly desirable. So unless you are very confident that it is not necessary, we recommend having your lease registered on the title. Lease registration is the process of registering the lease on the title to the property. Practically speaking, a conveyancer or commercial property lawyer would arrange lease registration via the PEXA electronic conveyancing system.

If the premises are located on only a part of the land, it may be necessary to have a plan prepared by a surveyor and lodged at the Land Titles Office.

Improvements rent is an additional rent that's paid when the owner has to make legally mandated alterations, additions or improvements to the building. An improvements rent is only chargeable when the alterations are directly legally required, usually by new legislation. Improvements resulting from everyday wear and tear or routine building maintenance are not usually chargeable. A registered lease is one in which the lease is registered against the title to the property.

Registration of the lease ensures that, should the freehold change hands, the lease is noted on the title so the new owner is aware that the lease exists. In addition, a registered lease ensures that banks and other moneylending businesses are aware of the lease and can therefore make appropriate adjustments when lending money against the title or against the lease itself. Registering a lease on the title is particularly valuable for those operating hotels, motels or lodges, as the structure is required for the operation of the business and can represent a significant investment.

However, only certain kinds of leases can be registered, typically those where there is a specific legal difference between the plot and the buildings upon it. What is registration?

But why does it matter? Why 3 years? Contact our Commercial Team. Search for:. Recent Comments.