Owners and lessees of retail property will soon operate under a clearer legal framework following changes by the Queensland parliament to the Act via the Retail Shop Leases Amendment Bill 2015.
Changes to retail shop leasing laws were planned by the former Newman government whose 2014 Bill lapsed due to election of the Palaszczuk Government, which followed up by introducing its Retail Shop Leases Amendment Bill 2015 in October. The Act, approved by parliament on May 12, simplifies and clarifies many of the provisions of the Retail Shop Leases Act 1994.
Retail Shop Leases Act Amendments
Among the changes are:
- All leases are excluded from the provisions of the Act if the premises are 1,000 sqm or larger.
- Exclusion from the Act of non-retail businesses in a multi-level building, where the building-level that hosts the premises contains 25% or less retail area and of businesses in a stand-alone single-level building, where 25% of its space or less constitutes retail area.
- The date a shop lease is entered into becomes the earliest of: the first date by which the lease is signed by all parties, the date the tenant enters into possession of the premises under the lease, or the date the tenant first pays rent under the lease.
- An assignment is deemed to be entered into on the earlier of: the first date by which the deed of assignment is signed by the landlord, tenant and assignee; or the date the assignee enters into possession of the premises with consent of the landlord.
- Landlords can object to a termination notice brought by a tenant on the basis the lessor disclosure statement is defective provided the lessor acted honestly and reasonably, and the tenant’s position has not been disadvantaged.
- Tenants need no longer provide monthly turnover certificates nor an annual statement of turnover via a registered auditor’s statement. Where turnover rent (or percentage rent) is payable, provision of turnover figures will have to be a condition of the lease.
- Where a lease contains an option and the lessee applies for an early determination of current market rent, the tenant needs to exercise the option within 21 days after receipt of the determination.
- A lease need only allow for relocation of a tenant’s business for the Act’s relocation provisions to apply.
- The tenant and the tenant’s guarantor are released upon assignment, so long as the disclosure obligations in the Act have been met.
- A landlord can recover reasonable legal costs for preparation of a final lease when a prospective tenant has agreed to the terms of the proposed lease, given written notice to prepare a final lease, but does not sign the final lease.
Other changes include:
- Excluding certain business disturbance from a landlord’s liability to compensate a lessee.
- Providing flexibility for a tenant to waive the lessor disclosure notice.
- Excluding procedural requirements where the State, the Commonwealth or a local government is a tenant in a retail shopping centre.
- Clarifying common-area tenancies excluded from the Act for the purpose of apportioning landlord outgoings, such as ATMs, vending machines and advertisement displays.
- Clarifying accounting and reporting obligations by landlords to tenants for promotion, advertising and sinking fund contributions.
The Queensland Law Society formed part of a retail sector and industry-professionals reference group that provided comment and recommendations as to the new laws.
Queensland Law Society president Bill Potts said the new Act provides further clarity for retail shop business owners, buyers and sellers.
Mr Potts said a number of amendments to the Bill were recommended by the society. “I am pleased the government has listened to concerns identified by the society,” he said.
“The broad stakeholder consultation which has occurred is a great example of how the interests of all parties can be accounted for and addressed during the legislative review process.”
The date on which the new Act will take effect has yet to be disclosed.
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