QHA_Sep-2020_Online
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Curt Schatz<br />
LEGAL MATTERS<br />
AS A RESULT OF THE<br />
STAGED RELAXATION<br />
OF COVID-19<br />
RESTRICTIONS<br />
IN QUEENSLAND,<br />
WE HAVE SEEN A<br />
GRADUAL INCREASE<br />
IN INTEREST IN<br />
THE HOSPITALITY<br />
TRANSACTIONAL<br />
SPACE.<br />
The incoming purchaser will<br />
take assignment of these leases<br />
as part of the transaction, so it<br />
is important to ensure that the<br />
terms of the lease are complied<br />
with to the extent assignment<br />
is concerned (for example,<br />
rent arrears or other potential<br />
breaches).<br />
Due to the pandemic, most<br />
tenants have sought to secure<br />
rent relief or other rental<br />
incentives. The extent (including<br />
quantum) of these relief measures<br />
should be quantified in any<br />
disclosure material and will need<br />
to form part of the purchase<br />
consideration (for example, any<br />
pre-settlement rent that has been<br />
deferred to post settlement as<br />
part of a rent concession).<br />
Development and building<br />
approvals<br />
Buyers and sellers alike need to<br />
consider the current regulatory<br />
status of the venue. If any<br />
redevelopment or renovation<br />
works have been undertaken,<br />
the seller should also make<br />
sure that all local government<br />
development approval conditions<br />
have been complied with and any<br />
final approvals obtained (such as<br />
certificates of classification).<br />
It is timely to note that OLGR<br />
approval is required for any<br />
COVID-19 related operational<br />
changes, such as changes to<br />
the licenced area or alterations<br />
to gaming rooms and gaming<br />
machine locations. This is<br />
yet another important item to<br />
investigate before progressing<br />
with a transaction.<br />
Is the business operating<br />
lawfully?<br />
Of course, every hotel will require<br />
a liquor licence! Those premises<br />
with gaming facilities will require<br />
a gaming machine licence. Most<br />
local governments will also require<br />
a premises to hold several other<br />
accreditations, including food<br />
hygiene, trade waste and signage.<br />
Both buyers and sellers should<br />
ensure that all relevant licences<br />
are in place and current.<br />
Mullins has advised the hospitality industry for more than 30 years. In this time, we have developed a team of<br />
specialist property and hospitality lawyers, renowned for their experience in hotel, pub and club transactions.<br />
If you would like to discuss the prospect of entering the transactional market, please call me on 07 3224 0230.<br />
<strong>QHA</strong> REVIEW | 27