Smith & Stanton

Wills & Estates | Property & Conveyancing | Business & Commercial – Professional Brisbane Northside Lawyers

Smith & Stanton
  • Home
  • Our Team
  • Our Services
  • Blogs
  • Careers
  • Contact Us

Commercial Lease vs Commercial Tenancy Agreement (CTA)

Home / Business / Commercial Lease vs Commercial Tenancy Agreement (CTA)

Commercial Lease vs Commercial Tenancy Agreement (CTA)

Posted on
September 30, 2016
by Matthew Smith

We often have landlord clients ask us if it is ok to enter into an REIQ Commercial Tenancy Agreement (CTA) as opposed to a full commercial lease which has been professionally drafted by a lawyer.  We advise landlords against entering into a CTA as we are of the view that it offers limited protection compared to a properly prepared lease.  Some of the main issues with a CTA include:

  • It does not have any provision for a bond (either cash bond or bank guarantee)
  • It contains limited make good provisions
  • There are no provisions for personal guarantees from the directors/trustees of the tenant company/trust
  • It cannot be registered on title
  • It cannot be used where the term (including options) are more than 3 years
  • The tenant is not required to properly insure
  • There is no requirement on the tenant to pay for water, gas, telephone and electricity usage
  • The outgoings that can be charged to the tenant are limited
  • There are no terms covering specific issues/matters concerning the property such as car parking, licenced areas, leases for part of a building/lot, storage spaces etc

In essence, a CTA document lacks a lot of substance when it comes to properly protecting the landlord’s rights and ensuring the tenant complies with its obligations.  There is no substitute for a properly drafted lease prepared by a lawyer experienced in leasing.  A CTA may be useful for small scale leases over short periods of time (such as 12-18 months), however any landlord should weigh up the risk of losing certain rights when using a CTA compared with a commercial lease prepared by a lawyer.  Don’t be fooled into thinking that a CTA is a cheaper option – when a problem arises (as they often do during leases) you will wish you had the protection of a well prepared lease document.

Smith & Stanton has a number of lawyers who are very experienced in all aspects of leasing.  If you need a lease prepared, or need advice on a lease or leasing issue, please contact one of our lawyers that specialises in this area.

BusinessProperty tags: Business / Commercial Property / Leasing
Matthew Smith

Matthew Smith practices in the area of commercial law, property law and business law. His special interest is commercial and retail leasing..

Comments are closed.

Latest Articles

  • Investment of Deposits
  • Option Agreements
  • Amendments to Retail Shop Leases Act in Queensland
  • Commercial Lease vs Commercial Tenancy Agreement (CTA)
  • Where Are My Keys?

Article Categories

  • Business
  • Estates
  • Money
  • Powers of Attorney
  • Property
  • Succession Planning

Recent Comments

    Archives

    • January 2019
    • November 2018
    • October 2016
    • September 2016
    • February 2015
    • December 2014
    • October 2014
    • July 2014
    • May 2014
    • April 2014
    • October 2013
    • August 2013
    • May 2013
    • May 2012
    • March 2012
    • November 2011
    • September 2011
    • August 2011
    • July 2011

    Contact Us

    607 Robinson Rd, Aspley QLD | Phone: (07) 3263 4244
    PO Box 41, Aspley 4034 | Fax: (07) 3263 1138

    Email
    © 2014 Smith & Stanton Lawyers. All rights reserved
    • Terms & Disclaimer
    • Privacy Policy