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Tony, Michael and David Partners at ABKJ
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Do I Need A Legal Advice Certificate?

I’m leasing a new retail premises and the landlord has asked for a Legal Advice Report. Do I need to provide one?

A Legal Advice Report is a certificate confirming that a tenant under a retail lease has received independent legal advice as to the content of the lease. It is mandated to be provided under the Retail Shop Leases Act 1994. In conjunction with a Financial Advice Report and a Lessee Disclosure Statement, it is a document that a tenant entering into a lease, or seeking an assignment of a lease as part of a business purchase is obliged by the legislation to provide. Only a tenant who is a major lessee (an entity that is concurrently leasing 5 or more other retail tenancies) is excused by the Act from providing a Legal Advice Report.

The areas of advice to be addressed pursuant to the Report include a review of the commercial information of the lease (rent, rent reviews, term, option periods), any security to be provided under the lease, the end of lease obligations, the consequences of breaching lease provisions, the requirements for any assignment of the lease and any unusual clauses or special conditions. It does not include any financial advice regarding the lease, or any town planning matters, as these are areas outside a lawyer’s area of practice.

Some tenants, mindful of start-up costs, may wish to avoid a solicitor’s account and seek to avoid obtaining and providing a Legal Advice Report. However, most landlords will make the provision of a Legal Advice Report a condition of the grant of the lease, and will therefore not sign a lease or grant access to a premises until the Report is provided. The landlord can also seek an order from the Queensland Civil and Administrative Tribunal that a Report be provided in the event that a lease has progressed without one being provided. In this respect, a Report must be obtained.

Even if it were not mandatory, we would recommend that prospective tenants obtain such advice. Going to the expense of getting proper advice prior to entering into a lease is a prime example of preventative costs being significantly less than the cost of trying to solve a problem or resolve a dispute once it has already occurred.

ABKJ’s Property Lawyers have extensive experience in advising both landlords and tenants in leasing matters, and can provide practical and cost effective advice in the course of providing a Legal Advice Certificate for a tenant. Please contact our office if we can be of assistance in this regard.