Some leases in Queensland which exceed 10 years require development approval which can cause the parties additional expense. Many landlords and tenants are unaware of this requirement.
It is important both landlords and tenants are able to identify what leasing arrangements trigger their need for development approval to avoid, unexpected costs and allow the parties an opportunity to negotiate an alternative leasing structure to avoid the need to obtain development approval.
The Planning Act 2016 (Qld) prevents a Lease for part of land being entered into if, the Lease Term (including Option Periods) exceeds 10 years unless local government approval is first obtained.
This is because Leases over part of a lot (other than part of a building) exceeding 10 years are captured by the definition of reconfiguring a lot and require development approval. The 10 year time frame applies not only to the length of the initial Lease Term, but also includes any Option Periods. For example, if a landlord grants a Lease to a tenant for 6 years with an Option in favour of the tenant to take up a further 6 year Lease the total length of the Lease (including Options) exceeds 10 years.
A Lease for the whole of a lot or part of a building greater than 10 years is not considered a reconfiguration of a lot and therefore does not require development approval.
If you require assistance with Leases that exceed 10 years, please contact our friendly Commercial Team to talk about it today.