This case is a great example of the leverage landlords can have in lease negotiations, especially when options to renew are not exercised properly by tenants. A well-advised landlord can use such moments not to punish, but to realign commercial arrangements more fairly. Clear drafting and proactive management were the keys to this practical and cost-effective outcome
– Bruce Pasetti, Practice Leader
The Problem | A cleaning bill Nobody wanted
For years, one particular tenant had been contributing to the cost of cleaning the shared bathrooms located near their premises. at roughly $150 a month, the charge wasn’t exorbitant but made a difference, especially since the tenant’s customers were the primary users of the facilities.
Suddenly, and without warning the tenant announced they would no longer pay for the cleaning. their argument? The lease didn’t expressly require them to cover these costs. legally, they had a point, and our client was left facing an unfair burden.
The Opportunity | Leveraging Lease Renewal
As it happened, the tenant was keen to extend their lease. However, they had missed the required window to exercise their option to renew. This gave our client a strategic advantages. They were under no legal obligations to grant a further term.
We advised that the lease could still be renewed but only if the tenant agreed to new terms. This included not only future bathroom cleaning costs but also a reimbursement of past expenses our client had been forced to absorb.
The Solution | A commercially sound compromise
Acting quickly, we prepared a formal letter to the tenant. It made the situation clear, while our client was prepared to offer a renewed lease, this would only occur if the tenant accepted the proposed amendments.
Face the risk of losing their site, the tenant agreed without hesitation.
We then drafted a deed of amendment, a form 13 Amendment for registration, and a lessor disclosure statement reflecting the new obligations. These were promptly registered on title, sealing the deal.
The Result | Peace of mind and clean bathrooms
Thans to a timely strategy and clear commercial communication, our client now has a renewed lease with a tenant responsible for the ongoing and retrospective cost of bathroom cleaning. The issue was resolved without litigation, preserving the landlord/ tenant relationship while ensuring the landlord isn’t left out of pocket for shared facility use.
Extra Information.
Our team | Key Contacts | Stratos Legal
Our Services | Property and Conveyance Law | Stratos Legal
Business QLD | Leasing premises | Business Queensland
