Terry, I would believe that the lease should also set out what may happen with the security bond, should the tenant go into liquidation or administration. The landlord needs to mitigate their loss, which I see that they have done in this situation. I bow to your knowledge of "equitable lease" or interest, however in Qld the property law act requires an agreement to be in writing to enforceable. That to me suggests that the current situation is a verbal tenancy, and the landlord has options.
tenants company doesn't exist anymore
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in discussing a partiuclar case (compeltely different facts) my lawyer said that the particular party in that action had no need to mitigate loss - just wondering what compels a party to mitigate loss?
in regards to this case, if the party doesn't exist I can't see any obligation to them at all (as they don't exist).
if the landlord has indeed mitigated loss in this case I think it is through pure chance, as it appears to be just a case of ignoring the non-existence of the tenant and continue as tho business was as usual?
meanwhile the bond still belongs to someone...whose is it tho?
Hi Peter,
I don't practice in the area of leasing so don't know much about it all. The situation in every state is that dealings in property need to be in writing, but there is also a branch of law known as 'equity' which may look at other unregistered interests - it may not be equitable for someone to be in an oral lease with the landlord benefiting from this and then the tenants be kicked out after 6 months when the landlord decides he no longer wants to honor the verbal agreement.
I recall there was case involving Waltons in a similar situation. A quick google shows there is a wikipedia entry
http://en.wikipedia.org/wiki/Waltons_Stores_(Interstate)_Ltd_v_Maher
I don't practice in the area of leasing so don't know much about it all. The situation in every state is that dealings in property need to be in writing, but there is also a branch of law known as 'equity' which may look at other unregistered interests - it may not be equitable for someone to be in an oral lease with the landlord benefiting from this and then the tenants be kicked out after 6 months when the landlord decides he no longer wants to honor the verbal agreement.
I recall there was case involving Waltons in a similar situation. A quick google shows there is a wikipedia entry
http://en.wikipedia.org/wiki/Waltons_Stores_(Interstate)_Ltd_v_Maher
am surprised you didn't hear anything from the liquidator... even to collect assets of the company? which makes me wonder... has it been liquidated yet?
Doesn't surprise me at all. some liquidators are incredibly slack.
Terry is correct about equitable leases. However this is messy and involves court and at a guess you would be up for around $2,500 just for advice and probably times it by 10 minimum to stand in court and say high to the judge.
I do commercial leasing as part of my practice and suggest you get this sorted immediately.
I would suggest seeking immediate legal advice about your ability to pull the bank guarantee or bond.
I would also suggest seeking immediate legal advice about whether you do indeed have a current valid lease or it is void.
If you are willing to enter a new lease with the parties, having a new lease drawn up by a good property lawyer should only cost you $1500. You would need to very carefully assess the security of the lease and of the lessee considering that they may be directors of a company that is in liquidation, may have personal guarantees etc.
Terry, thanks for that, makes very interesting reading. I do not wish to debate law with a lawyer, and I agree with Daryl, they should get legal advice. Its only when a spat starts, do you know what they understand was offered to them, and what the LL said or did, to give them that impression.
The couple of times when I had a tenant go into liquidation, they moved very quickly when there was the likelihood of assets, so that surprises me that was not done here. I imagine that there would have been assets such as plant etc, or even stock, as well as the security deposit.
At this stage, we are guessing a lot, as the OP has only given his understanding, and there is no doubt a lot more to be aware of.
The couple of times when I had a tenant go into liquidation, they moved very quickly when there was the likelihood of assets, so that surprises me that was not done here. I imagine that there would have been assets such as plant etc, or even stock, as well as the security deposit.
At this stage, we are guessing a lot, as the OP has only given his understanding, and there is no doubt a lot more to be aware of.
I have 2 clients at the moment where liquidators are not doing that.
One has $100k worth of computer stock sitting in a container, 5 months its been sitting there, we have asked them 3 times to come and get it. It was 100k new, won't be worth much now.
Another has been driving around in a car for over a year since his company went into liquidation. He has been paying the repayments directly and the liquidator has never mentioned it. He declared it in his RATA.
Simple, it belongs to the company in liquidation and will have to be paid back to the liquidator. Since you have effectively leased the property to a new entity you cannot expect to keep it and since no dilapidations report was submitted and new tenants are in place you don't have a leg to stand on trying to keep hold of it.
sounds like some town planning schemes I work inside, could drive a b double through some of the holes in policy.
not quite that simple...
- if the company is struck off, all assets vest with ASIC
- if no liquidation has occurred yet it is not the liquidator's..there isn't one
- the landlord may have claims on it depending on the terms of the lease
- were rent payments made when the company was insolvent? in which case,
- what personal guarantees are in the lease
- danel said the company was in liquidation
- as I said, if danel has started taking rent from a different entity without doing a final inspection there cannot be a claim. If anything the liquidator may have a claim against danel for leaseing a property he has a "valid" lease over. The liquidator may want to sell the business as a going concern and danel may have frustrated that.
- If the company made rent payments made when the company was insolvent that's not danels problem (unless it can be shown that he is in cahoots with the directors - who just happen to be paying him rent)
i think the terms were being used very loosely as danel hasn't even read his own lease
how can you know that without knowing the provisions of the lease? the lease may say that an act of insolvency forfeits the bond
possibly but really who knows? no one has any of the facts
it's absolutely his problem as all preferential payments and insolvent transactions need to be reversed and payment returned to the liquidator. in which case what is the recourse against the bond?
It's not a question of what's in the lease. He said it quite clearly in his opening post.
The lease probably does say that. But he said he hasn't received any notice as such so you can't just go and lease it to someone else.
That's true
Like that ever happens! and in any case he will still have top pay the bond back.
I think whatever the case, danel needs to get some serious legal advice as soon as possible.
just for your own reference, it happens all the time. I say this because if you own a business you need to be careful doing deals with shaky companies.
you can tell the liquidator to get stuffed and take your chances, but it is a risk. I know of 2 guys that just handed the cash back
