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ARTICLE · 15 JANUARY 2016

Clawing back lease incentives in Queensland

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The Court considered the clawback of lease incentives after specified events, including a tenant's early termination.

AustraliaReal Estate and Construction

By Gina Szwider

A landmark decision in the Supreme Court of Queensland may have far reaching implications for tenants and landlords alike. In the case of GWC Property Group Pty Ltd v Higginson & Ors [2014] QSC 264, the Court considered the clawback of lease incentives following specified events, including where the tenant does not complete the full lease term.

A lease's claws

Incentives in lease agreements can be structured in various ways including:

  • contributions to tenant's fit outs;
  • rent free periods; or
  • rent abatement over all or part of the lease term.

They are often given to a tenant on the basis that the tenant will comply with the terms of the lease and be in occupation for the whole of the lease term.

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