Does my lease need to be registered?
Every State and Territory in Australia has its own Land Titles Register which keeps track of all legal rights over land. These registers are public, and anyone can search them for a fee. The registers include records of who the owner is, and any other rights affecting the land – such as mortgages, leases, easements, and many more.
This system of registering title is called Torrens Title. It was first invented in South Australia in 1858 and has since been adopted all around the world.
What does lease registration do?
Under the Torrens Title system, the register is not just a record of title to land – the act of registration creates title to land.
If a retail lease or a commercial lease is not registered, then it is just a private contract between the landlord and the tenant. When two people have a contract between themselves, the rule of ‘privity of contract’ means that it can only be enforced between the people who are parties to the contract.
Registering your lease turns this private contract into a part of the legal title of the land. Because the register of land titles is public, anyone can look at the title and they will see that the title is affected by a lease.
Why does my lease need to be registered?
If you are a tenant, it is very important to make sure your lease is registered on title. With some limited exceptions, if something happens to the title of the land, an unregistered lease can be destroyed if someone else becomes the registered owner of the land for any reason. This can include:
- If the landlord sells the property to someone else
- If the landlord dies and someone else inherits the property
- If the landlord defaults on their mortgage, and the bank steps in to sell the property
If your commercial lease or retail lease is not registered and any of these things happen, then the new owner of the property may not have to honour the terms of your existing lease. You could also lose any other rights attached to the lease – including the right to renew your lease under an option.
For most leases in both the ACT and in NSW, the Landlord must register a lease if the tenant asks them to do so. In some cases, a Landlord who fails to register a lease when required may face penalties.
How is a Lease registered?
Every State and Territory has different rules.
In NSW, Leases are registered using an online e-conveyancing platform. Only lawyers and licenced conveyancers can use this platform.
In the ACT, Leases are registered by lodging an original copy of the lease with the land titles office. The form needs to be certified by a lawyer, or by the parties to the lease. If the parties to the lease certify the lease without a lawyer, there are extra requirements that need to be met.
It is still strongly recommended to get a lawyer to register your lease, because any mistakes will cause the lease to be ‘requisitioned’. The land titles office will charge you requisition fees if there are mistakes, and registration could be delayed for a long time. Sometimes, the lease may be rejected entirely, and the registration fees may be forfeited.
Further reading
elringtons lawyers regularly provide legal advice in relation to a range of commercial matters. Please contact our Business and Commercial Team for more information or to make an appointment call (02) 6206 1300
