Keeping our clients informed is important to us so we regularly publish our thoughts on topics that will be of interest to anyone involved with commercial property. We call them ‘insights’ and we hope you find them of interest.
When does the Retail & Commercial Leases Act apply?
Parliamentary draftsmen (sorry! draftspersons) who are the people who draft the legislation for Parliamentarians to consider, love to use double negatives for some reason. Maybe it’s just so us mere mortals can’t easily understand what they are saying.
Anyway, the way the Retail & Commercial Leases Act (the Act) reads, it can be difficult to answer the question set out above. So, we have found that the better question is ‘When doesn’t the Act apply?’.
So here is how it works-
Our interpretation of the Act goes like this.
The Act applies to ALL Leases of commercial premises, EXCEPT in the following circumstances: -
- - If the Rent is greater than $400,000
- - If the Tenant is a Public Company or a subsidiary of one
- - If the Tenant is an Insurance Company
- - If the Tenant is the Government. (Federal, State or Local)
- - If the premises are to be used for a purpose where no goods are sold to the public, where no services are provided to the public or where no
member of the
public is invited in to negotiate for the supply of services
- - If the term of the lease is less than 1 month
The Act was put in place in order to protect the tenant’s interests, so it goes without saying that there are real benefits to the landlord if the Act doesn’t apply, so it’s worth checking in every case.
As always if you have any questions, please let me know.