It doesn't matter if you're the landlord of an
industrial, retail or residential property – your objective
is the same - to find a good property and an equally well-suited
tenant. Here are the top five mistakes that landlords make in
achieving these goals:
Failing to research and conduct proper searches on a
It's all too common to come across landlords who have been
so eager to get a tenant into their premises that they have let the
excitement and thrill of receiving rent cloud their judgement as to
whether the tenant is actually the right fit. Before deciding to
take on a tenant, your lawyer should undertake the necessary
bankruptcy and asset searches so you can make sure that the tenant
is financially viable.
Failing to rectify structural damage to the
Another common mistake we encounter is landlords operating under
the misguided belief that once they have leased their premises,
they aren't responsible for any repairs or maintenance.
Landlords must be aware (and this is subject to the terms of the
Lease) that you will, more often than not, be obligated to repair
any structural damage to the premises – that is, damage
affecting the framework or load bearing capacity of the
Trusting a handshake deal
If we could give one piece of advice to every landlord today, it
would be, without a doubt, to write everything down! Once upon a
time handshake deals were airtight and basically guaranteed each
party's performance. Unfortunately, this time is long gone and
as a consequence, you need to cover yourself. Communicate via email
or letter, and if you make a phone call or have a meeting, make
sure you outline the details in an email. Establishing a paper
trail will assist you in avoiding problems down the track.
'If it's outside the Lease, I can't help
Progress is impossible without change. We operate in a dynamic
market and if the past year has been any indication of what to
expect in the Australian property market then Landlords must be
willing to adapt and cater (reasonably) to the needs of their
tenants. The provisions of a Lease aren't set in stone - if a
Landlord is open to the idea of amending certain provisions, then
this can be done through a variety of means, one of which is a
Variation of Lease Deed. The ability of a Landlord to respond to
their tenant's concerns is fundamental in building a
relationship of trust, longevity and loyalty.
Enforcing the Terms of the Lease
This may seem to contradict point 4 but there is a reason for
including it. We often act for Landlords who have let their
tenant's actions 'slide' or who have swept them under
the rug - despite there being a clear breach of the provisions of
the Lease. As a Landlord, whilst you may think that this builds
rapport with your tenant (note - in some circumstances it may),
there are ramifications for 'nice' Landlords who have
repeatedly let their tenant breach terms of the Lease (including
the date of payment of rent, not allowing pets in the premises and
ensuring the premises is kept reasonably clean). The effect of this
has been that when the Landlord needs to make a claim, as per the
rights under the Lease, the tenant responds with "Well, you
were aware of this months ago and did nothing to rectify the
situation" or "This is the first time I am hearing about
this being an issue;" leaving you without much of a legal leg
to stand on.
These five mistakes are easily avoidable – it's a case
of doing your research and then once you have the tenant in place,
making sure you continue to dot your i's and cross your
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Warranties can be risk-shifting mechanisms when the party giving the warranty is not the party at fault for the defect.
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