Update to Recent Amendments To The Retail Leases Act NSW
Recent Amendments to the Retail Leases Act NSW have received Royal assent by the passing of the Retail Leases (Amendment) Bill 2016 NSW and there have been some significant changes to the requirements and obligations of Lessors (landlords) involving Retail Leases.
Outgoings – Disclosure by Lessors (landlords)
Whilst Lessors have been required to disclose outgoings with respect to a retail lease to incoming lessees (tenants), the new requirements formalise the Lessor’s obligations to provide certainty and clarity for lessees when it comes to signing a new lease.
The amendments now require Lessors to make full disclosure in the lessor’s disclosure statement of any obligation of the lessee to contribute to the lessor’s outgoings and to prevent the recovery from a lessee of outgoings that are not disclosed. The amendments are expanded to include fees charged by a lessor for services provided by the lessor.
Registration of Leases now mandatory for leases 3 years plus
The amendments now formally detail that any retail lease over 3 years must be registered.
Further the amendments make it clear that a lessor is not entitled to recover any expenses involved in the lessor obtaining the consent of the mortgagee of the premises leased
Return of executed lease to the Lessee
A common complaint by lessees had been that the executed lease had not been returned to them in a timely manner after execution. The new obligations clarify that a lessor must, subject to certain limited exceptions, return an executed lease to the lessee, within 3 months of provision to the lessor.
5 year Minimum term now removed
The previous obligation that a retail lease was deemed to be a minimum of 5 years without the lessee’s provision of a solicitor’s certificate has now been removed.
Compensation to Tenants
Lessee’s now have a right to compensation from the Lessor where they are legally able to terminate the lease in the first 6 months of the lease.
The amendments and changes also include:-
- Protections of tenants where demolition clauses are relevant.
- Extension of release of security bond to a date when an appeal against a judgement can be made (note that this previously was when judgement was entered)
- Expansion as to the powers of the Tribunal to rectify a mistake in the lease;
- Setting requirements as to the appointment, training and experience of specialist retail valuers;
- Clarifying procedure as to assignment of lease and release of liability of the outgoing lessee;
- Exclusion of online turnover income from turnover rent;
- Establishment of an online retail bond service;
- Extend the Act to include certain stalls in markets.
At Quinn Lawyers, in addition to providing advice as to the lease generally, we can assist
- Lessors with guiding you through the Lessor’s obligations when entering a lease; and
- Lessees to ensure that the Lessor complies with the new disclosure and registration regime.
If you require any further information in relation to Retail Lease Act, please do not hesitate to contact our team of lawyers at The Quinn Group on (02) 9223 9166 or submit an online enquiry form today.