Leases Flashcards
Lease
commercial contract
Conditions
- pay rent when due under lease
- keep premises in good repair
- landlord entitled to enter premises at all reasonable times to view state of repair (if not, can service notice to repair)
- can re-enter premises if rent is owing for period of 21 days. Can also do if tenant has not performed or observers any terms of lease
Insurance
landlord must insure building for full replacement and reinstatement insurance or indemnity to full insurable value on premises
Guarantee
Guarantor guarantees performance of tenant’s obligations and indemnifies the landlord against claims
Reinstatement
requirement of reinstatement at end of lease. What to do when leaving
Expiry
Deed of Lease usually includes a right to renew but if tenant does not renew lease and continues to occupy the space after expiry of the tenancy, the lease becomes month to month
rent review
document sets out a mechanism for current market rent reviews
outgoings and gst
tenant is usually responsible for paying service charges for premises and a proportionate share of outgoings for building, as well as GST payable on the lease or the outgoings
maintenance
the tenant is responsible for the care and maintenance of leased premises. Check the terms
Mortgages
a loan to finance the purchase of real estate usually with specified terms and conditions relating to repayment including period, rates).
Borrower gives lender security in form of a charge registered against the title to the property as collateral for loan.
Just a credit contract.
Detailed on CT
Mortgage and regulation
Govt
LVR - preferably 20-30%
Table loans
have repayments that remain constant at level you choose. Pay more off principal as time goes on
Reducing loans
repayments change each period. Interest reduce and principal remain k
Interest only
Pay interest not principal.
Transactional Loan
combines all bank accounts in one, reduce interest
Floating rate
make lump sum payments or repay whole mortgage
Fixed rate
provides agreed fixed periodic payments
capped rate
gives you security of knowing what your max rate but if floating rate drops below capped rate, interest drops too
combination or split rate
fixed rate but with option of lump sum repayments if you want to
Mortgagee Sales
when borrowers don’t perform.
lenders have contractual right to sell secured property. Long legal process
Mortgagee auctions
the agreement does not include many of the fine print clauses that are usually there. There are additional risks.
Pitfalls
- not getting vacant possession on settlement date (have to evict)
Auctions
Covered under FTA 1986. Part 4A.
- can be auction for land
- for goods
- online auctions
Auction - process in which property of any kind is offered for sale by an auctioneer on behalf of a vendor.
needs registered auctioneer.
Auction process is as expected.
Buyer can’t attach conditions to auction purchase. Vendor shouldn’t really bid but they can if there is reserve price, hasn’t been met and it is clear it is a vendor bid.
There is a reserve price, auctioneer has ability over everything, can withdraw property, etc.
Auctioneers Act 2013
Bidder
Needs to read and understand Auction Particulars and Conditions of Sale.
Can bid on a cash unconditional basis.
Can pay 10% deposit and sign contract.
Agreement made for auction
Unconditional - can’t change mind.
Make payments to REA.
Balance is paid on settlement
Terms in ASP
Purchaser has some onus –> have to pay for reconnection and buying chattels (approve of them).
Governed by REA and such
Special provisions
Notice to participants (section 36).
- notices of terms must be readily available to view by all participants and such.
- has to include whether the sale is subject to a reserve price and whether vendor bids are permitted.
