Landlord’s right to draw down bank guarantees supported
Posted on Thursday, April 04 2013 at 12:03 PM
A decision in the Victorian Supreme Court has backed the conditional right of a landlord to draw down funds from a tenant-provided bank guarantee.
The
ruling has cleared the way for the landlord to use the funds to restore their
commercial premises.
The
court heard that a dispute had occurred over the condition the property was
left in by the tenant on completion of the lease.
The
claim was also made that the tenant was maintaining occupation of the premises
and was still required to pay rent.
After
the landlord drew funds down from the bank guarantee, the tenant sought an
injunction from the court to prevent the funds being used until after a pending
trial on the matter.
The
court ruled that the landlord was entitled to use the money towards repairing
loss or damage to the property.
The
decision recognised that the bank guarantee was less than the landlord’s
potential claim for damages and they had capacity to pay back the guarantee if
they were ruled against in any subsequent action.
According
to law firm Allens, the decision will make it difficult for tenants to prevent
landlords from using bank guarantee funds if they aren’t acting fraudulently.
Follow us on Twitter.
Was this article helpful? Place a link to it from your website, or share it using the button below.
Recent articles:
Landlord’s right to draw down bank guarantees supported
Property market off and running
Data integration makes Queensland research a breeze
Sellers raise asking prices as market recovers
Property values are going up
Perth median house price at record high
Leave a comment
Comments
Article source: http://feedproxy.google.com/~r/API_Property_News/~3/llCUPFTilKU/landlords-right-to-draw-down-bank-guarantees-supported