I am a tenant of a commercial property that was recently sold to new landlords. The lease is unregistered but it contains an option to renew at the end of the lease term. Prior to purchasing the new owner knew about the lease and its terms. I have continued to pay rent to the new registered proprietor but now have been denied the right to exercise my option to renew. I have learned that when I move out they plan to put a new tenant in and register the new lease. Can they do this?
Lawyer Answers (1): Answers from lawyers are general preliminary responses. They are not formal legal advice and cannot taken account of all your circumstances. They do not create a lawyer–client relationship.
Answer by Neha Sharma, Hillsdale 2036 NSW
- The courts have previously decided that unless there is dishonesty the use of registration to defeat an unregistered interest will not amount to fraud.
- Under section 43 of the Real Property Act 1990 (NSW) notice of an earlier unregistered interest is taken to be outside the definition of fraud. In your case even if the new registered proprietor knew about the lease and its terms they cannot be punished by law for exercising their right to register an interest that is inconsistent with your unregistered interest.
- It may be different if the registered proprietor had acted dishonestly or made fraudulent representations to induce the original owner to sell the property. For example if the registered proprietor assured the previous owner and you that your interest would be protected and then registered an inconsistent interest for the purpose of seeking indefeasibility they may be seen as acting fraudulently.
- One possibility may be for you to seek to register your lease before it expires. This must be done before the lease term runs out because the LPI will not accept lodgement of an expired lease in any circumstances. Depending on the terms of your lease you may need to pay stamp duty and other charges.
- If you are concerned that there has been dishonesty on the part of your landlord or want to know more about your options regarding your tenancy you should see a lawyer.