Security of tenure

Question 1

Contracting out

Answer 1

Notice must be given to the tenant

If notice given at least 14 days in advance: tenant can provide an ordinary declaration that they understand the implications of excluding security of tenure provisions (sign)

If notice given less than 14 days in advance: tenant has to make a statutory declaration before a solicitor

Lease must state that security of tenure provision has been excluded and refer to the notice and the declaration

Question 2

Section 25 notice

Answer 2

Served by the landlord, must be served no less than 6 months and no more than 12 months before the date of termination

States the date of termination and brings current tenancy to an end

Friendly: landlord willing to grant new tenancy and sets out proposed terms

Hostile: opposes grant of new tenancy on certain grounds

Question 3

Section 25: hostile notice grounds

Answer 3

Mandatory: alternative accommodation available, intend to demolish, occupation for own purposes (must show intention)

Discretionary: delay in paying rent, breach of obligations (breach must be persistent and serious), underlease of part – need whole

Compensation available if not tenant’s fault

Question 4

Section 26 notice

Answer 4

Served by tenant, minimum notice period of 6 months, max notice period of 12 months prior to the proposed commencement date

For a tenancy of a year or less, the tenant cannot start the renewal process, although the landlord can with a friendly section 25 notice

Landlord counter notice: 2 months from date of service (can only oppose on one or more of the statutory grounds)

Question 5

Section 27 notice

Answer 5

Served by tenant, must be given at least 3 months before intended termination date (no earlier than the date on which contractual term ends)

Once a section 27 notice has been served, the tenant cannot serve a section 26 notice, nor can the landlord serve a section 25 notice

Question 6

Procedure following section 25 or 26 notice

Answer 6

The earlier of two months after the notice or the service of a landlord’s counter-notice, either party may apply to the court for a renewal lease

The deadline for applying to court is the termination date specified in a section 25 notice, or the day before the proposed commencement date specified in a section 26 notice

The deadline may be extended by the parties’ agreement in writing

Court can order grant of new lease or termination of old lease

Question 7

Terms of the new lease (court order)

Answer 7

New term cannot exceed 15 years
Open market rent (goodwill and tenant’s improvements are disregarded)

Other terms relevant to the circumstances

(If the tenant is not happy with the terms determined by the court, or has simply changed its mind, it has 14 days to ask the court to revoke the court order (court must agree if asked, tenant will have no right to renew))

Question 8

When do security of tenure provisions apply?

Answer 8

Periodic / fixed tenancy

Occupied by tenant (underlease of whole or part will mean tenant will lose security of tenure)

Business purposes

Excludes tenancies of 6 months or less (can become protected if tenant in occupation for 12 months or more), agricultural tenancies, service tenancies and mining leases