Tenure amendments, sub use and termination
During the term of your lease, you may need to ask for Brisbane City Council’s consent for some legal matters.
- amendment of the lease/licence terms
- mortgaging the lease
- assignment (transfer of lease)
- surrender of the lease/licence
- sub use and hire agreements
- breaches and termination
- holding over.
Your organisation will need to ask for Council’s consent to amend conditions of your lease/licence.
Many community lease conditions are standard, meaning you cannot change them.
The most common amendment requests are changes to permitted operating hours. You cannot amend the lease/licence area, or the parties to the lease/licence, without the approval of Council and such changes require negotiation of a new lease/licence with Council.
If Council approves the amendment, City Legal (Council's legal services provider) will prepare the relevant documents to record the amendment. This may include a Form 13 Amendment. All relevant parties must execute these documents. If you have a registered lease, the amendment must be registered with the Department of Natural Resources, Mines and Energy. Your organisation will be responsible for registration fees and City Legal professional fees.
To seek Council's consent to amend the conditions of the lease, you must send a letter from your organisation (on your official letterhead) detailing the reasons the amendment is necessary.
During the term of a lease (does not apply to licence holders), your organisation may seek to borrow money from a financial institution for development works. This means that you may need to mortgage the lease to provide security for the loan. You need Council’s consent to do this.
Council will assess your application and may ask you to submit more information (e.g. extra financial information).
The consent, if given, may be subject to certain terms and conditions.
If Council grants consent, City Legal will liaise with your organisation and/or the financial institution to complete the necessary documents.
To seek Council's consent to mortgage the lease, you will need to provide the following:
- a letter from your organisation (on your official letterhead), requesting Council consent to a mortgage of the lease to the financial institution
- details of the loan (including the amount) and how your organisation will use the funds
- if the loan is to pay for capital works, details (including concept plans) of these works
- a copy of your organisation's most recently audited financial statements and current year-to-date statements
- if available, include copies of the Mortgage and Right of Entry documents from the financial institution.
It is possible that, due to changed circumstances, your organisation may want to assign (transfer) the lease to another organisation.
An assignment of your lease is subject to Council approval. You must obtain Council's consent in writing before an assignment can take place. Council may impose conditions as part of its consent including the parties entering into a Deed of Consent.
If your organisation owes money to Council, you need to settle any outstanding amounts as part of the assignment.
If Council approves the assignment, City Legal will prepare the relevant documents to finalise the assignment. This will include a Form 1 Transfer and a Deed of Consent. All relevant parties must execute these documents.
Your organisation will be required to pay any stamp duty, Department of Natural Resources, Mines and Energy registration fees and City Legal professional fees.
To seek Council's consent to an assignment, your organisation will need to provide:
- a letter from your organisation (on your official letterhead) requesting that the lease be assigned to the proposed new tenant. In your letter, state the reason for your request. Two committee members of your organisation must sign the letter
- a letter from the proposed new tenant (on their official letterhead) advising they wish to take over the lease of the premises, providing details about their organisation and an explanation of what activities they will operate from the premises. Two committee members of the proposed new tenant organisation must sign the letter
- required documentation from the proposed new tenant including a copy of their certificate of incorporation, constitution, most recently audited financial statements and certificate of currency for public liability insurance.
Your organisation may wish to surrender or partially surrender its interest in the lease/licence during the agreement term.
To surrender your interest, you need to provide a letter from your organisation (on official letterhead) requesting the surrender and nominating a surrender (vacate) date you wish your interest in the site to end. The letter will need to be signed by your organisation's president. A copy of the minutes of the decision to surrender the lease/licence is also required.
Once received, Council will arrange to meet with your organisation to inspect the facility, prior to the vacate date and provide further detail about the process for handing over the facility in clean, tidy and good repair, and the removal of any chattels.
If approved, Council will provide formal notification of the acceptance of the surrender and prepare the appropriate documents. All parties must execute these documents and they must be lodged with the Department of Natural Resources, Mines and Energy. Your organisation will be responsible for registration fees and City Legal professional fees.
You will also need to notify any user groups you have that they will need to vacate prior to your surrender date. You will also need to pay and disconnect any services.
If you have a licence or seasonal licence agreement with Council, you are not permitted to sub-licence, or share occupancy, of the premises, or any part of the premises, with any other organisation.
If you have a lease agreement with Council, you can apply to share occupancy of your leased premises with other suitable community organisations and user groups. This can be done:
- formally through the establishment of a sub-tenancy agreement which is registered
- informally through the use of a hire agreement.
If you are looking to hire out the facility for a one-off function or event, and the use is not a large event requiring an event permit and it complies with all existing lease terms and conditions (such as times of use), you do not need Council approval.
Your organisation must seek Council's written consent before entering into any agreements to sublet or share occupancy of the premises.
Council uses the following criteria as a guide to assess the suitability of a sub-tenant or other regular usage arrangement:
- the proposed sub-tenant is considered by Council as a suitable organisation to occupy the facility
- that the proposed use of the facility is an acceptable and compatible extension of the current use of the site and the existing lease
- granting of the sub-tenancy or other arrangement will be in the interest of your organisation and the public
- the proposed term, hours and permitted use are consistent with your lease
- your organisation has demonstrated how the income generated from the sub use will contribute to your organisation/facility.
To seek Council's consent to enter into a sub-tenancy or hire agreement, your organisation will need to provide a letter (on your official letterhead) requesting approval of the proposed sub use arrangement and a copy of the proposed agreement, including:
- details of the proposed sub user (certificate of incorporation, constitution or business registration)
- purpose of the sub use and activities to be conducted at the premises
- plan of the area to be shared
- term of the agreement
- operating hours of the sub user
- proposed fees for use and how the additional income would be applied to the facility.
If approved, Council may impose conditions as part of its consent including the parties entering into a Deed of Consent.
Depending on the proposed sub use you may also be required to apply for development approval.
Council tenants are required to meet all lease/licence agreement terms and conditions. Failure to comply with the conditions of your agreement is considered a breach and can result in your organisation being issued a minor or major breach notification.
Refer to your lease/licence agreement to understand what is considered a minor or major breach.
If you breach a lease/licence agreement, Council will serve a breach notice letter detailing the issue and a timeframe for rectification. Failure to meet your obligations and rectify breaches may result in your lease/licence being terminated. Council may also sue you for damages incurred as a result of a breach.
Termination of a lease/licence may occur if a tenant enters into any form of liquidation, is would up or dissolved, enters into a scheme of arrangement for creditors, is placed under official management or external administration, or a receiver and/or manager of any of its assets is appointed.
If a lease/licence agreement is terminated, Council may recover all money payable by the tenant. On termination of an agreement, a tenant must vacate the premises and leave them clean and tidy and in good repair. Chattels must be removed within 14 days of the termination of the lease/licence.
At the end of a lease/licence agreement period, a tenant of Council freehold land may continue to occupy the premises after the term, subject to the consent of Council. The terms and conditions of the agreement remain and the use is on a monthly basis. One month's notice by either party can be given to terminate the monthly tenancy.
If you are a Council tenant with a lease/licence agreement over State-owned land in trust to Council, there are no holding over provisions. To continue use of the premises, a new lease or licence must be negotiated.
For further advice on amending, mortgaging, assigning (transfer of lease), surrendering, sub use, breaches, termination, and holding over a community lease/licence, phone Council on 07 3403 8888.