It is important for the landlord and the tenant to register a commercial lease on the title of the property with Landgate (WA’s register of land ownership). Where a lease exceeding five years is unregistered, either the landlord or the tenant can terminate the lease when the property is sold to a third party.
Registering a lease
Parties can register a lease at Landgate when the term of the lease (excluding options) exceeds three years. This is done by lodging at Landgate a completed form, attaching an original copy of the lease and paying the registration fee which is currently $160. Registering a lease requires the consent of the landlord and the mortgagee / bank (where applicable).
If the landlord fails to register a lease exceeding five years the tenant may terminate the lease on the landlord selling the property. Buyers of property need to be aware of this and ensure that:
1. leases (which are capable of registering) are registered;
2. it is a condition of the contract for sale that such leases are registered prior to the sale; or
3. the tenant confirms in writing that they will continue the lease after the sale of the property.
Landlords should also ensure that the lease agreement sets out the obligation of the tenant to remove the expired leases.
This is general information only, and does not constitute specific legal advice. If you would like further information in relation to this matter or other legal matters please contact our office on Freecall 1800 609 945 or email us now.