Registration of Commercial Leases

Once a lease for a commercial premises has been entered into, it is also important to consider registration of that lease in order to protect the interests of the parties.


Why Register a Lease?

Having a fully executed lease detailing the terms of the lease between a Lessor and Lessee binds the parties to that agreement, however in some circumstances, if the lease is not registered, it affords little protection in the event that the land is sold or transferred during the term of the Lease.

Under the Property Law Act 1974, a lease for a period of more than 3 years (including options for renewal), may be registered with the Department of Natural Resources and Mines.  In doing so, the parties’ interest in the property is registered on title and protected against any dealings with the property such as the sale or transfer of the property to a third party.

If a lease for a term greater than 3 years is not registered and the property is sold or transferred, the buyer of the property is not obliged to acknowledge and carry on any unexercised option under the lease once they become the registered proprietors of the property.

This could be severely detrimental to a Lessee and its business as they may be forced to relocate or to re-negotiate a new lease, both options will result in costs not previously anticipated.


When is registering a lease unnecessary?

It is not necessary to register a lease which is for a term less than 3 years (including options for renewal) as such leases are automatically protected under Land Title Act 1994.


Costs of registration

The costs involved in registering a lease can include the cost of obtaining a survey plan of the premises as well as any registration fees payable to the Titles Office.  These costs are usually payable in full by the Lessee.


It is recommended that legal advice is sought before entering into a lease. At McLaughlins Lawyers, we are always happy to assist you with any questions regarding commercial leasing. Please contact our team if you require our assistance.

Author: Anna Doughan

Partner: Ian Kennedy

Date: 11/08/2016