Why Register a Lease?
After a lease is signed by the landlord and tenant, the tenant will often be asked by their solicitor: “do you want the lease to be registered at the Land Titles Office?”
Given the costs in doing so (often $500 to $1,000 depending on the premises), there must be a good reason for it.
Well often there is.
If your lease (including options) is for a period greater than 3 years, a new landlord will not have to honour your options if the lease is not registered. That is, registering you lease protects you against future owners kicking you out.
An example:
- you are the tenant of premises and you have a lease with an initial term of 3 years with an option period of 3 years (i.e. 6 years in total);
- your lease is not registered;
- your landlord sells the building in which the premises are located to Bill in the second year of the lease;
- Bill wants to use the leased premises himself.
In these circumstances, Bill is not required to honour the option period and can have the tenant removed upon the expiry of the 3rd year.
Where the location of the business is crucial to the success of the business, this could be catastrophic.
If the lease was registered in this example, Bill would have had to honour the full length of the lease even though he was not the owner at the time the lease was entered into.
Therefore, to avoid a problem like this happening to you, make sure your lease gets registered.
Joe Kafrouni, Legal Practitioner Director, Kafrouni Lawyers
Disclaimer
The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. Business people should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.
Liability limited by a scheme approved under professional standards legislation.
Consultation
For new clients, I offer a paid initial phone consultation for $1,430 (incl. GST), which covers up to two hours of my time.
This option provides a relatively low-risk way for us to discuss your situation and explore how I may be able to help. I will provide initial advice and direction where possible. However, most matters require more than two hours to complete; if that’s the case, I’ll provide a follow-up proposal outlining how I'm able to help and an estimate of legal fees.
I set aside only a limited number of consultation times. If you can’t find a suitable time, or would like to clarify anything before booking, please get in touch — I’ll do my best to accommodate you.