{"id":303,"date":"2017-01-12T09:28:03","date_gmt":"2017-01-11T23:28:03","guid":{"rendered":"http:\/\/dev2.e-cbd.com\/abkj\/articles\/?p=303"},"modified":"2024-05-23T12:28:45","modified_gmt":"2024-05-23T02:28:45","slug":"retail-shop-lease-changes","status":"publish","type":"post","link":"https:\/\/www.abkj.com.au\/articles\/retail-shop-lease-changes\/","title":{"rendered":"Retail Shop Lease Changes"},"content":{"rendered":"

Are you a landlord or a tenant under a Retail Shop Lease? There have been some changes to the law that you need to be aware of.<\/p>\n

After a comprehensive process beginning in 2011, the latest amendments to the Retail Shop Leases Act 1994 (\u201cthe Act\u201d) have been passed into law. A short summary of the changes is as follows:<\/p>\n

Disclosure Obligations<\/h2>\n
    \n
  1. Landlords must now give any tenant who exercises its option a lessor disclosure statement<\/a> within 7 days of a tenant exercising their option. If the landlord fails to comply with this obligation, the tenant will have the right to terminate their option within the first 6 months of the option period. This is an additional level of administration placed on landlords that did not previously exist under the Act.<\/li>\n
  2. A tenant can now elect to waive its right to a 7 day disclosure period prior to entering into a lease (by providing a legal advice certificate<\/a> and signed waiver). However, it is now a requirement that a tenant provide its disclosure statement to the landlord 7 days prior to entering into possession of the premises.<\/li>\n
  3. Any franchisor intending to enter into a new sub-lease or franchise agreement can now request its landlord to provide an updated lessor disclosure statement, the costs of which can be passed on by the landlord to the franchisor.<\/li>\n
  4. In the sale of a business that includes a retail lease, a seller must give to any potential buyer an assignor disclosure statement and a copy of the lease at least 7 days prior to the signing of the business sale contract. This disclosure period can be waived by the potential buyer providing a waiver notice.<\/li>\n<\/ol>\n

    Financial Considerations<\/h2>\n
      \n
    1. A tenant may now withhold payment of outgoings under a lease until a landlord has provided the annual outgoings estimate, and\/or the audited outgoings statement as required.<\/li>\n
    2. Any outgoings estimate must include a breakdown of any administration or centre management fees charged as an outgoing.<\/li>\n
    3. If a tenant is required to contribute to a centre promotions fund, a landlord must make available its marketing plan detailing the intended expenditure prior to the start of each relevant accounting period.<\/li>\n
    4. A landlord is no longer able to recover the cost of any fee for obtaining mortgagee\u2019s consent to a lease from the tenant. They are however entitled to recover legal fees from a proposed tenant in the event that the tenant has requested the preparation of lease documents for signing, but ultimately elects not to proceed with the lease.<\/li>\n
    5. The extent and frequency of the provision of turnover information is now a matter of negotiation between the parties, rather than monthly as previously mandated.<\/li>\n<\/ol>\n

      Exclusions from the Act<\/h2>\n
        \n
      1. Any retail leases to government tenants are excluded from the disclosure requirements of the Act.<\/li>\n
      2. Major lessees (meaning tenants of 5 or more retail premises) can also opt out of the disclosure requirements, as well as the restrictions on the type of rent reviews that can be applied.<\/li>\n
      3. The Act also no longer applies to any retail shop with a floor area of greater than 1,000 square metres, or leases for a non-retail use in buildings where the floor on which the premises is located uses 25% or less of its total lettable area for a retail use.<\/li>\n<\/ol>\n

        Other Amendments<\/h2>\n
          \n
        1. It has now been clarified that a personal guarantor of a retail lease is released from any liability to the landlord under the guarantee following an assignment of the lease to a new tenant, provided that the disclosure obligations relating to the assignment have been complied with.<\/li>\n
        2. Refurbishment provisions in leases must now give the general details of the nature, extent and timing of the refurbishment required, otherwise they may not be able to be enforced.<\/li>\n
        3. A landlord can also now limit its compensation liability for a planned disturbance that occurs within the first 12 months of a retail lease, provided sufficient details of the planned disturbance are contained in a detailed written notice issued to the tenant prior to the entry into the lease. This will be of use to any landlords entering into any leases prior to or during a planned refurbishment or redevelopment.<\/li>\n<\/ol>\n

          As stated, this is just a short summary of the changes now in effect. Please do not hesitate to contact our office<\/a> and talk to a commercial lawyer<\/a> should you require any further information.<\/p>\n","protected":false},"excerpt":{"rendered":"

          Are you a landlord or a tenant under a Retail Shop Lease? There have been some changes to the law that you need to be aware of. After a comprehensive process beginning in 2011, the latest amendments to the Retail Shop Leases Act 1994 (\u201cthe Act\u201d) have been passed into law. A short summary of the changes is as follows: Disclosure Obligations Landlords must now give any tenant who exercises its option a lessor disclosure statement within 7 days of a tenant exercising their option. If the landlord fails to comply with this obligation, the tenant will have the right… Continue Reading<\/a><\/p>\n","protected":false},"author":1,"featured_media":304,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,2],"tags":[],"class_list":["post-303","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-law","category-property-law"],"yoast_head":"\nRecent Retail Shop Lease Changes<\/title>\n<meta name=\"description\" content=\"Find out about recent changes to the law relating to Retail Shop Leases & how they may affect you. 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