When providing an option to a retail tenant to renew a lease, landlords can reduce the risk of a dispute arising by confirming the notice is sent, delivered and acknowledged.

Introduction

Stricter burdens were imposed on landlords under the Retail Leases Act in regard to notifying tenants of their option to renew their lease for a further term. The changes are applicable to both new leases and existing leases dated from September 2020 onwards where the last date to exercise a further option falls after 1 January 2021.

Notice Requirements

If the retail premises lease contains an option for the tenant to renew the lease for a further term, the landlord must comply with the requirements listed under section 28(1A) of the Retail Leases Act. This section requires the landlord to provide the tenant with a written notice at least three (3) months prior to the last date that the tenant has to exercise the option. The notice must set out the following:

The date by which the option to renew the lease may be exercised by the tenant;
The rent payable for the first 12 months under any renewed lease term;
The availability of an early rent review (as per section 28A);
The availability of a cooling off period (as per section 28B); and
Any changes to the most recent disclosure statement provided to the tenant, other than any changes relating to rent.

Failure to provide notice

If the landlord fails to provide a tenant with all of the information required or does not provide the notice within the required time frame, section 28(2)(a) states that the date after which the option is no longer exercisable is instead three (3) months after the date when the landlord correctly notified the tenant as required. This may automatically extend the lease beyond the term of the lease. In such circumstances, the lease will continue on the same terms and conditions as applied before the lease term ends, unless agreed otherwise between the landlord and tenant.

If the tenant then exercises its option to renew after the term of the lease ends, the new term is taken to commence on the expiry of the previous lease, disregarding the period when it was automatically extended.

The tenant must receive the notice

In 2022, VCAT further obligated landlords to ensure the notice is received by a tenant to ensure they are “notified” in DylanbellaPty Ltd v Loung (Building and Property) [2022] VCAT 412 (13 April 2022).

Situation

The lease in this case was for an initial five (5) years and included two options to renew the lease, each for a further five (5) years. The landlord was required to give notice to the tenant of their option to renew the lease prior to the end of the first term. The landlord said that it posted a notice letter by post to the tenant six (6) months before the end of the lease term. However, the tenant claimed that they never received the letter and the landlord had no record of the letter being posted.

Following the last day of the lease, the tenant remained in occupation of the premises on a month-to-month overholding for years before the landlord gave the tenant a notice that the lease would terminate. The dispute arose when the tenant then served a notice to the landlord to exercise a further option in response to the termination.

Decision

VCAT held that the letter was most likely posted to the tenant despite there being no evidence. However, this was not a finding that the tenant had been appropriately “notified”, as is required by section 28, because there was no evidence that the tenant received the letter.

Accordingly, the tenant was not deemed to be “notified” and was therefore allowed to exercise its option to renew for a further term. This was particularly problematic for the landlord who had sold the property with vacant possession and was subsequently unable to provide this.

This case consequently requires a landlord to be able to prove that a notice under section 28 is firstly, provided to the tenant, and secondly, received by the tenant.

Tips to sufficiently notify a tenant

Send the notice letter by tracked post and require a signature from the recipient at the time of delivery.
Send the notice by tracked email.
Keep records that the notice letter has been sent and received.
Request acknowledgment from the tenant that they have received the notice letter and follow up with the tenant if they do not provide this acknowledgement.
Provide the notice letter to the tenant in person.

How Sharrock Pitman Legal can assist

As Accredited Specialists in Property Law, our lawyers have extensive experience advising landlords of their obligations under retail lease agreements. Additionally, our Property Law team can also advise landlords on tenant-related issues.

Please do not hesitate to contact our Property Law Team on 1300 250 506 or via email at property@sharrockpitman.com.au

The information contained in this article is intended to be of general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation. ‍

Written by a member of our Legal Team

For further information contact

Jing Yuan Tay

Jing Yuan is a property lawyer and a member of our Property Law team. Please contact Jing Yuan directly on (03) 8561 3327 or email jingyuan@sharrockpitman.com.au.

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When providing an option to a retail tenant to renew a lease, landlords can reduce the risk of a dispute arising by confirming the notice is sent, delivered and acknowledged.

However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Supreme Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be published on the Supreme Court website for at least 14 days prior to any application being lodged.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself usually does not take long to process the application (maybe another 1 to 2 weeks) and this is completed using the electronic Supreme Court filing system. This means you do not have to go to a Court hearing. The timeframe for processing applications for Letters of Administration is even less, given that there is no Will document for the Court to consider. There is also a general discretion for the Court to raise a 'Requisition' asking for more information before they review the application - this can sometimes delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate or Letters of Administration. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.

You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE:

(03) 8561 3318

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Notices of Option to Renew: Landlord Obligations

When providing an option to a retail tenant to renew a lease, landlords can reduce the risk of a dispute arising by confirming the notice is sent, delivered and acknowledged.

Introduction

Notice Requirements

Failure to provide notice