9 Proposed Changes to The Law Relating to Retail Leases!
Recently a bill was passed in the lower house of the NSW Parliament making some important changes to the Retail Leases Act 1994. Some of the most important changes that are expected to pass through the upper house are as follows:-
There will no longer a requirement that a retail lease must have a minimum term of 5 years. This means that there will be no need to obtain a section 16(3) certificate from the tenant’s solicitor to waive the minimum term.
It will be required by law that any retail lease lasting longer than 3 years must be properly registered by the landlord, within 3 months of the tenant signing the lease.
The landlord will be required to provide the tenant with an executed copy of the lease within 3 months of the tenant signing the lease.
The law will require that a landlord must return a bank guarantee to the tenant within 2 months of the tenant completing the performance obligations under the lease to secure the bank guarantee.
Currently if a landlord fails to serve a Disclosure Statement on the tenant within 7 days before the lease is entered into then the tenant may terminate the lease within the first 6 months. Under the proposed changes not only will the tenant be able to terminate the lease, but the tenant will also have the right to claim compensation.
The tenant will no longer be required to pay outgoings to the landlord if they are not stated in the lease Disclosure Statement.
If a lease requires “turnover rent” then turnover from the retailer’s online transactions will no longer included for the purposes of determining the turnover rent, except where goods or services are delivered or provided from the actual retail shop, or if the transaction takes place when the customer is in the shop.
If when a tenant seeks the landlord’s consent to transfer of the lease to a new tenant the landlord fails to provide an updated Disclosure Statement within 14 days after the tenant’s written request, the tenant will now be required to prepare their own updated Disclosure Statement to the best of their knowledge.
If passed the new law will clarify that landlords cannot require that tenants pay the cost of the landlord’s mortgagee’s consent to registration of the lease.
If you have any concerns or queries about your retail lease or non-retail commercial lease you may consult our Property Law team.