QLD: Is your business' lease registered?

A lease which is in a registrable form (a Titles Office Form 7 in Queensland), can be registered on the title for the property. Once registered, the lease is shown as an interest on title, noting the name of the tenant and the commencement and expiry dates, along with the next option term (if there is one). Registration has potential benefits for both the Tenant and Landlord.

Tenant:

If the landlord sells/transfers the property, the new owner/landlord may not be aware of a tenant’s lease. Any lease which is longer than 3 years (including the option periods) is not protected unless it is registered. If registered, the lease interest is said to be “indefeasible” (think… “undefeatable”). For short leases (3 years or less, including the option periods), there is automatic protection (under legislation).

A tenant’s interest can be defeated if it is not protected (either by automatic ‘short lease’ protection or by registration on title), for example, by a new owner (who doesn’t have notice of the tenant’s interest) or by a mortgagee bank who repossesses the property.

If a tenant’s interest is defeated, the tenant may look around for someone to blame, like the original landlord who made contractual promises (which is one reason why registration is potentially beneficial for the landlord too).

Landlord:

Firstly, having all leases registered on title can be attractive to a potential buyer. Property investors (and their financiers) tend to like seeing everything is in order and having a complete record of all leases in existence on title is nice and neat. 

Secondly, if a landlord sells/transfers the property, with an unprotected lease, and the new owner/landlord refuses to honour the tenant's lease and/or option period(s), the original landlord risks being in breach of contract. The breach is that the original landlord promised to provide a lease and/or an option period to a tenant and failed to deliver on that promise.

Ideally, when a landlord sells/transfers, all of their obligations to a tenant are transferred over to the new landlord, but this can depend on the wording of contracts and notices given, and is a messy and uncertain way to deal with the issue. 

Instead, registration of a lease on title serves as a notice to everyone (including, for example, a buyer of the property) that there is a lease interest in existence. The buyer cannot then claim not to have had notice of it. This protects the original landlord from the risk of contractual breach by ensuring the new landlord is aware of, and must honour, the tenant’s lease.

Registration is usually at the cost of the tenant (most lease precedents provide this).

Something to think about! 

As always, you should always seek advice specific to your particular lease/property and your individual circumstances.

Is your Business Name registered?

As most business owners are aware, it is common practice to trade under a ‘trading name’. Not to be confused with a legal name, a trading name relates to your business trading activities. This name can be anything (within reason) and commonly reflects the services or products which your business provides. However, some business owners may be unaware of their obligation to register their business name and the consequences of not doing so (carrying on business under a name not registered can mean a penalty of 30 penalty units which equates to $6,300 currently).

In May 2012, ASIC took control of the registration of business names, incorporating the previous State registers. Having a national register (maintained by ASIC) makes searching for business name availability much easier (and a lot of administrative sense)!

When starting a new business, a name is a very important feature. It typically tells the public who you are and what you do, helping to attract business. If left unregistered, you risk losing out on your desired business name to someone else, as well as committing an offence under the Business Names Registration Act, which can lead to hefty monetary penalties. Registration is a fairly low cost (amidst all the other costs of setting up and running a business).

More information on business name registration can be found at the link below:

https://asic.gov.au/for-business/registering-a-business-name/

Some questions you may be asking yourself:

Do I need to register my Legal Name as a trading name?
No, if trading under your legal name, there is no need for that name to be registered.

Does registering my business name give me exclusive rights to that name?
No, if you want exclusive rights to that name, it is best to register a Trade Mark.

Can I have more than one business name registered to my ABN?
Yes, you can have multiple business names registered to one ABN. 

Can I alter the business name after it is registered?
No, unfortunately once a name is registered it cannot be altered. To get the name which you are seeking, you must apply for a new business name. 

What are the costs of registering a business name?
The cost of registering a business name depends on the timeframe you register for. Currently, a 1-year registration costs $36.00 and a 3-year registration costs $84.00.

Where can I find out about the availability of a business name?
You can find out if a name is registered by searching here:
https://asic.gov.au/for-business/registering-a-business-name/before-you-register-a-business-name/business-name-availability/

It is recommended you also search to see if there is a registered Trade Mark for your desired business name (to avoid infringing a registered Trade Mark). You can search for Trade Marks at IP Australia: https://www.ipaustralia.gov.au/ 

While you're in search mode, it's also a good idea to see if the web domain name is also available!

Special thanks to Myles Heath (law student) for his assistance with this article!

QLD Residential Contracts and the Cooling-Off Period!

Having just celebrated Easter (hope you all had some quality time off), we’re in amongst a bunch of public holidays.

So, it’s probably a good time for a quick ‘refresher’ on how ‘Cooling-Off’ works!

You may (or may not) be aware that there is typically a ‘Cooling-Off Period’ in Queensland under most contracts for residential properties (when buying).

The cooling-off period is not just 5 ordinary/calendar days, but 5 ‘business days’.

A ‘business day’ is a day which is not a Saturday, a Sunday or a Public Holiday (in the place where any relevant act is to be or may be done).

The way we work out the cooling-off ‘period’ is a bit tricky! It usually starts on the business day a copy of the contract is received by the buyer (at any time). It then ends at 5pm on the fifth business day.

It’s best to talk to your solicitor before attempting to terminate under the cooling-off provisions. Usually your solicitor will send the relevant notice of termination for you (if that’s what you want, after weighing up the pros and cons).

Easter example:

The buyer receives the fully signed Contract on Thursday, 18 April 2019 (this counts as business day 1 of 5, not day 0). The cooling-off period ends at 5pm on Monday, 29 April 2019 (business day 5). In addition to the Saturdays and Sundays not counting towards the 5 business days, Good Friday, Easter Monday and Anzac Day also do not count!

‘Cooling-Off’ isn’t as great as it may initially sound. Beware of the termination penalty of 0.25% of the Purchase Price! Any easy way to think of this is $250 per $100,000 of the Purchase Price of the property. For example, for a $500,000 property, the termination penalty would be 5 x $250 or $1,250. This can only be deducted from a Deposit held, so if there is no Deposit held, no termination penalty to be collected by the seller.

The cooling-off period can be waived (given up entirely) or shortened by the buyer, by written notice to the seller.

As with most areas of law, there are exceptions. Below are some examples:

• A cooling-off period does not apply to a contract formed on a sale by auction (or entered into with a registered bidder no later than 5pm on the second clear business day after a property is passed in). 
  
• Some other examples where a cooling-off period does not apply:
• A contract formed because of the exercise of an earlier granted option;
• Where the buyer is a publicly listed corporation (or subsidiary of);
• Where the buyer is the State or a statutory body;
• Where the buyer is buying at least 3 lots at the same time.