If you are the tenant of a commercial lease in Queensland, you will need to consider how best to protect your property. One of these is to register your lease. While registering a lease is not compulsory in Queensland, it is wise to do so when the lease is over three years in length. This article explains what registering a lease entails and when it is a good idea to register one.
The Elements of a Lease
When you enter into a lease with a landlord, you receive an exclusive right to deal with the property for the term of the lease. While the landlord retains the land title, you have the right to occupy and use the land without their interference. This is unless you breach the lease and, subsequently, the landlord has a right to terminate the lease.
State law regulates both the lease and how the landlord is required to deal with the land in Queensland.
What is Registration?
As a tenant, the landlord may ask you if the lease is to be registered. Lease registration refers to the process of noting your interest in the lease on the title of the land. This is done through the relevant state department empowered with land titles.
In Queensland, at the time of writing, this department is the Department of Natural Resources, Mines and Energy. Once a lease is registered, it acts as notice to anyone who searches the land title that the lease exists.
Protection for Shorter Leases
It is not a compulsory requirement to register a lease in Queensland. However, registration can benefit you in certain circumstances, especially for leases that are longer than three years in length.
If a lease is less than three years in length in Queensland, the law has inbuilt protections for tenants, known as ‘indefeasibility in title’. This means that registration is not necessary because the law will protect your interest in the lease as if it were registered. This is due to the lease being considered short.
Protection for Longer Leases
For leases three years and over, there is no automatic protection for indefeasibility of title. Therefore, in these circumstances, registration is desirable. If you want to ensure that your rights are legally protected, registration is particularly important.
What Are the Benefits of Registering A Long-Term Lease?
When you registered a lease of over three years in Queensland, it ensures that your interest in the land is officially noted on the land title.
Having your interest registered on the title has the effect of creating the lease as a legal interest. This means that your name as tenant is noted on the title to the land and becomes a “legal fact”.
An unregistered lease is an equitable interest. This means that your interest as tenant is not noted on title to the land. While you could go to court to claim interest as lessee in the property, this is not as strong as a legal interest. Therefore, a legal interest would be more advantageous for you.
When a lease is noted on the title, it takes the form of an entry on the computer folio for that property. This makes the title easily discoverable when searched for through the Department of Natural Mineral Resources and Energy database.
If the Landlord Wants to Sell the Land
In beneficial circumstances, the landlord will not sell the land during the term of the lease and there will be no disputes during the term of the lease. If so, then the registration will not be controversial and the term of the lease may pass without any problems.
However, a landlord may move to sell the land during the term of the lease. Furthermore, a mortgagee (such as a bank) may take possession of the land during the term of the lease. In these circumstances, it is very beneficial for the lease to be registered as it ensures that you can enforce your rights under the lease against the new landlord or mortgagee in possession.
If you are the tenant of commercial premises in Queensland, you will need to consider whether your lease should be registered. You should be aware that for leases:
- under three years, registration is not compulsory because the law automatically provides protection; but
- over three years, there is no similar protection and registration could be beneficial.
If you have any further questions about registering a commercial lease in Queensland, contact LegalVision’s leasing lawyers on 1300 544 755 or fill out the form on this page.
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