What is a Lease Area Survey?

When it comes to rental or lease agreements, accuracy is critical.

Even seemingly small inaccuracies in measurement of a leased area can have a huge effect on long-term lease outcomes.

It’s crucial that landlords, property managers and tenants fully understand the terms of the lease with accurate information.

A lease survey is a survey of lettable area in relation to the whole property. It provides information to inform the rental value of the lease area, and assists landlord, property managers and tenants in understanding lease arrangements. A Licensed Surveyor can advise you on the ideal method of measurement for your property, and coordinate the documentation of information to fulfil Property Council of Australia guidelines.

Before beginning the process to have a lease survey completed on your property, it’s important to understand what information a Lease Survey would provide and how the measurements are taken.

PCA Method of Measurement Guidelines

When would a lease area survey be required?

Landlords may require a lease survey to ensure they are in compliance with Property Council of Australia requirements, as well as the Retail and Commercial Leases Act 1995, governed by the Office of the Small Business Commissioner.

In South Australia, a lease for less than one year is protected under the Real Property Act 1886, and a Lease Survey is not necessarily required. However, a lease for longer than one year should be registered against the Certificate of Title through conducting a lease survey; this is the only protection against your interest in the property.

Property Council of Australia Method of Measurement Guidelines

The method of measuring the lettable area of a space will vary depending on the type of area that is being leased.

The Property Council of Australia has established Method of Measurement guidelines defining three standards used in commercial leases:

Net Lettable Area, including office buildings and tenancies
Gross Lettable Area, including industrial buildings, showrooms and freestanding supermarkets
Gross Lettable Area – Retail, including retail tenancies in shopping centres, commercial buildings and strip shops.

The PCA Method of Measurement guidelines ensure that a consistent approach is taken for calculating lettable areas across a variety of industries or applications, from corporate office buildings to supermarkets and retail spaces within shopping centres. The guidelines are a great starting point, but a Licensed Surveyor will be able to interpret and advise on the best application of the guidelines for your unique needs, and how best to complete your lease plan.

It’s important to note that the landlord and tenant need to agree on the method of measurement that will be used before beginning the survey, determining what will be included or excluded from the lettable area calculation.

Additionally, the level of detail of the survey will be determined by the purpose of the survey. For example, if the lease agreement spans more than one year, you may require the lease plan to be registered against the Certificate of Title. To have the lease registered against the Certificate of Title, you will need a Licensed Surveyor to complete a lease survey and submit a Filed Plan to the Lands Titles Office for approval.

Floorplan

What is a Filed Plan?

A Filed Plan is a lease plan (the results of a lease area survey) that has been lodged with the Lands Titles Office (LTO) for registration against the Certificate of Title.

A Filed Plan outlines the area a tenant has access to under the lease agreement, not in metres squared but by using the features that define the space, such as walls or boundaries. It will also include other rights that the lessee may have access to, also known as licence areas.

A Filed Plan must be drafted to strict Lands Title Office specifications. Once lodged, the LTO will issue of a Filed Plan reference number for referral. When the plan is approved, a conveyancer or solicitor will lodge any contracts or lease agreement documents, referring to this Filed Plan. Once these documents are processed, the lease will appear on the Certificate of Title for the property.