July 29, 2013                                                                        

ATTN: Peter Mitcher
Yu Fun Pty Ltd
89 Short Street


Dear Mr Mitcher,




To assist us in finalising the Lease and advising you appropriately, please:

  • identify the most important aspects of the Lease/arrangement to you;
  • let us know if there are any important or unusual features relating to the premises or the land;
  • let us know if there are any particular issues or concerns of which you are aware or which may be relevant with respect to:
  • the premises;
  • the proposed use of the premises;
  • the proposed Tenant;
  • the circumstances or conditions of the grant of the Lease;
  • let us know if there are any particular concerns you may have with respect to the matter;
  • confirm in writing whether any representations have been made by the Landlord or its agents to the Tenant.

Compulsory Statements:
Under the Retail Shop Leases Act 2994 (Qld) (“the Act”) you must provide to the lessee, at least seven (7) days prior to the entering into of the lease, a draft copy of the lease, as well as a lessor disclosure statement.

The lessor disclosure statement will outline the full terms and conditions of the lease, including trading hours, details of other tenants in the centre, traffic flow and outgoings. It is available from the Department of Justice and Attorney-General website (justice.qld.gov.au). We can prepare this document on your behalf if required.

The lessee is required under the Act to provide to you a lessee disclosure statement, which details the potential tenant’s business background and relevant experience.

If the lessee currently operates less than five (5) retail businesses in Australia then they are also required to provide to you a legal advice report and a financial advice report. These reports specify that the lessee has met with both a lawyer and an accountant who has advised them on their obligations and rights under the lease.

Permitted use clause:
A permitted use clause must also be drafted for inclusion into the lease. This clause details the type of business that may be operated in the premises and must detail the type of shop that the lessee is to operate and the merchandise they may sell.

As the lessor, under the Act, you are responsible for the expenses required for the preparation of the lease and any costs associated where it is submitted for reassessment of stamp duty. 

Registration and survey fees, as well as reasonable expenses incurred in obtaining the approval of your mortgagee, may be passed onto the lessee.

Registration of lease:
As the lease is for a period of three years with no options, registration of the lease is not compulsory under the Property Law Act 1974 (Qld). However it remains an option. Registration is designed to protect by the lessor and the lessee by creating an official record of the lease.

The lessor may require the lessee to contribute to the expenses associated with the registration of the lease.

Certified copy of the lease:
Within 30 days of the signing of the lease you are required to provide a certified signed copy to the lessee.

Lease Terms:
Please read carefully the commercial terms outlined below, as well as our comments on certain points where we require more information from you in order to complete a draft of the lease.

We confirm the commercial terms are:

  • Landlord:
  • Tenant:
  • Security:
    We draw to your attention no security is provided for in the Lease.  The obligations of the Tenant are entirely unsecured.
  • Premises:
    Shop 5, Gold Coast Fashion Place
    89 Short Street, Burleigh Heads
    QLD 4220
  • Term & Commencement Date:
    Commencement Date – 1 July 2012
    Term of Lease: 3 years
  • Option/s:
  • Rent:
    $24,000.00 PER ANNUM
  • GST:
    $2,400.00 PER ANNUM
  • Rent reviews:
    Please advise us if you intend put a rent review process in place.
  • Outgoings:
    $6,000.00 PER ANNUM
  • Utilities:
    Please advise us on how utilities will be calculated and charged to the lessee.
  • Landlord’s works:
    The landlord agrees to install new carpet and construct change rooms in the shop to a maximum value of $2,500.00.
  • Permitted use and approvals:
    Unless instructed otherwise, the scope of our retainer does not extend to providing advice with respect to town planning issues or any development approvals or permits that may be required in relation to the use or occupation of the premises.
  • Tenant’s works/Tenant’s fit-out:
    Fit-out of the premises is at the cost of the lessee, except for the landlord’s works as described in clause 13.
  • Redecoration:
    Redecoration of the premises is at the cost of the lessee, except for the landlord’s works as described in clause 13.
  • Tenant’s restrictions on carrying out works:
    Please advise us if there are any restrictions on the tenant in carrying out works at the premises.
  • Insurance:
    Please advise us of the insurance obligations of the lessor and the lessee.
  • Landlord’s maintenance/repairing obligations:
    Please advise us on the maintenance and repairing obligations of the lessor.
  • Tenant’s maintenance/repairing obligations:
    Please advise us on the maintenance and repairing obligations of the lessee.
  • Asbestos:
    Please advise us if there is any asbestos present in the premises.
  • Cleaning:
    Please advise us if there are any specific cleaning obligations required of the lessee or lessor.
  • Signage:
    Please advise us of the signage permitted and/or required by the lessee.
  • Special Conditions:
    Please advise us of any special conditions that need to be included in the lease document.


No financial or tax advice or advice on commercial terms:
You will need to satisfy yourself as to the financial terms of the arrangement.  Our retainer does not extend to giving advice regarding the commercial viability of the transaction or the tax or other financial implications of the Lease. 

You should also consider whether there are better or alternative arrangements regarding the commercial terms of the Lease, e.g. rent reviews or the type of security (if any) obtained from the Tenant.  Unless instructed otherwise, we will not be providing advice in relation to alternatives for commercial terms of the Lease.

We recommend you obtain additional professional assistance and advice from a specialist financial adviser or tax professional, such as your accountant, with respect to the commercial viability or the tax implications of the grant of the Lease or any conditions contained in the Lease (such as incentives).

Mortgagee’s Consent:
Failure to obtain your mortgagee’s consent may cause you to be in breach of your mortgage, which may entitle your mortgagee to take steps under that mortgage.  We recommend you instruct us to seek to obtain your mortgagee’s consent to the grant of the Lease.  Please let us know if you require us to do so and, if so, please let us know the contact name and phone number for the person you deal with at your mortgagee’s office.

Certificate of title:
Our title search indicates a certificate of title is issued for the property.  Please either forward the original certificate of title to us or let us know where it can be obtained.  The original certificate of title must be produced to register the Lease.

Binding nature of Lease:
Unless you instruct us otherwise, we will negotiate the terms of the Lease on the basis that you do not wish to be bound until the Lease is actually signed by both parties.  We will reserve your right to require changes to the Lease if necessary.  However some actions by the parties may mean the parties are bound prior to that time.  For example, we recommend you do not:

  • allow the Tenant access for fit out;
  • accept payment of rent; or
  • allow the Tenant to commence trading,

prior to the Lease being finalised if you do not wish to be bound prior to the Lease being signed.

Unless you specifically instruct us to do so, we have not investigated whether any Heads of Agreement, Letter of Intent, Letter of Offer or similar documentation may have bound the parties prior to the Lease.  If you are particularly concerned about whether a binding arrangement has already been entered, you should instruct us to conduct a review. If such documentation may have bound the parties, which is subject to specific conditions, you may lose the ability to enforce the binding arrangement on the tenant if the conditions are not met within any relevant timeframes or a reasonable period.

No physical inspection:
We do not carry out a physical inspection of the property and it is up to you to do this. Please let us know immediately of any concerns relating to the physical attributes of the property or the impact the lease or the lessee may have on nearby properties.


The next step for you is to address the issues highlighted above and provide this information to us at your earliest convenience. We can then finalise a draft of the lease and submit it to you for approval.

If you have any questions then please get in contact with us.

Yours faithfully,

Jesse Inns