A recent decision of the Administrative decisions Tribunal of New South Wales indicates problems that can arise for lessors and lessees when exclusivity is granted in a lease.

The lease did not expressly confer exclusivity on the lessee, however, the lessee was able to rely on clear representations made by a senior employee of the lessor to the lessee about 2 years before the lease commenced, whilst negotiations relating to the lease were in progress. The decision illustrates the significance of such representations, the care required when representations are made and the necessity (if possible) of having some record of such representations.

As the lessor took inadequate action to enforce the representations for about 3 years substantial damages were awarded.

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