Following are the four kinds of property investment facilities available to a foreign investor in Australia:

  1. Residential Real Estate: Residential real estate includes properties other than commercial properties, such as, offices, factories, warehouses, hotels, restaurants and shops and rural properties such as, lands which are used wholly and exclusively for carrying on a business of primary production are known as residential real estate.
  2. Commercial Real Estate: Commercial real estate includes vacant and developed property other than residential purposes, such as offices, factories, warehouses, hotels, restaurants and shops. It does not include rural land, but includes rural property which does not fall within the definition of rural land, such as vacant land for forestry plantation or mining operations.
  3. Rural Land: Rural land is a land which is wholly and exclusively used for carrying on a substantial business of primary production. Primary production is defined under the Income Tax Assessment Act, 1997 and refers to production resulting directly from the cultivation of land, animal husbandry or farming, horticulture, fishing, forestry, viticulture or dairy farming.
  4. Accommodation facilities: Accommodation facilities that are commercial in nature, such as hotels, motels, hostels and guesthouses are considered to be developed commercial property(ies). Accordingly, acquisitions of interests in such facilities valued below the relevant monetary threshold are exempted.
  5. Urban land corporations or trusts: A corporation or trust is deemed to be an urban land corporation or trust if it holds more than 50 per cent of its assets in Australian urban land, which is a non-rural land.

A commercial lease is a rental agreement for office, warehouse or other business spaces. Commercial leasing agreements vary widely in their terms. The terms and conditions of the lease agreement should be carefully studied and scrutinised to understand one’s rights and obligations, since it is a legally binding agreement. In case of a commercial lease, legal and commercial advice should be obtained before making any commitment or signing any lease related document or making payment of any deposit or other amount.

A Landlord is entitled to both legislative and common law rights in case of default by a Tenant under a Commercial Lease. A Landlord may lodge a simple claim for possession or seek an urgent application for injunction or relief against forfeiture, where the Tenant is seeking to resist eviction.

There are six methods of terminating a lease before the date of termination specified in the lease agreement. These methods are as follows:

    1. Surrender of the lease;
    2. Termination pursuant to a term in the lease;
    3. Frustration of contract;
    4. Termination pursuant to specific statutory grounds;
    5. Merger; and
    6. Breach of fundamental term by either the Landlord or the Tenant.

As per common law, a Landlord can have a clause included in the lease agreement which prohibits the Tenant from assigning or subleasing their leasehold estate. Alternatively, the Landlord can also have a clause which qualifies his consent for sublease. This situation is regulated by the Conveyancing Act 1919 (NSW) specifying that the Landlord cannot unreasonably withhold consent.

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