The 12 key changes in the new ADLS 6th Edition Deed of Lease

by | Nov 21, 2012 | General property Law, Leasing

Changes to the ADLS 6th Edition Deed of Lease that help the landlord:

  • CPI rent review – the CPI review ratchets commencement rent and could ratchet inflation based growth only.
  • Insurance excess – the recoverable excess increased to $2,000.00 per claim where a Tenant’s act or omission causes the destruction or damage.
  • Unit Titles Act 2010 – the Tenant must now comply with the Unit Titles Act 2010 as well as the rules.

Changes to the ADLS 6th Edition Deed of Lease that help the tenant:

  • Costs – Landlord now bears its own costs for lease negotiation, preparation, rent reviews or renewal of lease.
  • Improvements rent – removed from the deed of lease.  Landlord still might have the right to terminate though if it has to expend an unreasonable sum because of legislative change.
  • No access in emergency – if the tenant cannot gain access then rent and outgoings abate. The tenant has a right to terminate if there is no access for an agreed period.
  • Management expenses – the lease is made clear that management expenses payable via outgoings cannot include any profit derived by the landlord or its shareholders.

Changes to the ADLS 6th Edition Deed of Lease with mixed effect:

  • Repair and maintenance – the tenant pays through outgoings for inherent defects, renewal or replacement of building services. However the Landlord pays to upgrade the building to comply with the Building Act and must now keep the premises weatherproof.
  • Condition statement – a condition statement is attached to the deed as evidence of the condition of the premises as at commencement date.  Who pays for it?
  • Access for works – rent and outgoings abate whilst works are carried out by the landlord if the tenant’s business use is materially disrupted.  The landlord can require the tenant to vacate so works can be done.
  • Security on assignment – a bank guarantee may be offered by a tenant instead of a personal guarantee but it is not clear who dictates what is required.
  • Implied terms – the terms implied by the Property Law Act 2007 are now expressly excluded. Conflicts between the implied and express terms are avoided.

We will go into a bit more detail into some of these changes in future articles.