retail leases amendment (review) act 2017 - aicnsw · 2017-11-13 · retail leases amendment...
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AUSTRALIAN INSTITUTE OF
CONVEYANCERS (NSW DIVISION)
2017 EDUCATION PROGRAM
Retail Leases Amendment
(Review) Act 2017
PRESENTED BY:
TONY CAHILL
20 MARCH, 2017
NOVOTEL PARRAMATTA 350 CHURCH STREET, PARRAMATTA
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Retail Leases Amendment (Review) Act 2017
Tony Cahill Legal Author and Commentator
TABLE OF CONTENTS
About the author ...................................................................................... v
Retail leasing reform ......................................................................................................... 1
The (tortuous) pathway to reform...................................................................................... 1
The 2013 Review .............................................................................................................. 6
The 2016 Bill ................................................................................................................... 11
Key issues in the 2017 amending Act ............................................................................. 13
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ABOUT THE AUTHOR
Tony Cahill was admitted to practice in 1981. After 13 years with a
medium-sized city law firm, Tony commenced practice on his own account
at Chatswood. In July 2002, Tony commenced a ‘sabbatical’ from private
practice to concentrate primarily on legal education and writing.
He is a member of the Law Society’s Property Law Environmental,
Planning and Development Committees. He has been a member of the
Re-Draft Committees for the editions of the Contract for the Sale of Land
since 1992, and the editions of the Contract for the Sale of Business since
2000.
In 1995, Tony completed the Property Agency TAFE course which was
then the most usual educational qualification for holders of licences under
the former Property, Stock and Business Agents Act 1941.
He was a co-author with Russell Cocks and Paul Gibney of the first NSW
edition of 1001 Conveyancing Answers, and is currently the co-author with
Gary Newton of Conveyancing Service New South Wales and Annotated
Conveyancing and Real Property Legislation New South Wales, both
published by LexisNexis Butterworths.
Tony has been a part-time lecturer at the University of Technology,
Sydney, in construction law, property transactions, legal studies, and real
estate law, and has lectured at the Sydney and Northern Sydney Institutes
of TAFE in various law subjects. He currently lectures in the Applied Law
Program at the College of Law, Sydney.
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Retail Leases Amendment (Review)
Act 2017
Tony Cahill
____________________________________________________________
Retail leasing reform
Retail leases reform in New South Wales has been in prospect since
April 2008, with several false starts over the last nine years.
The Retail Leases Amendment (Review) Bill 2016 was introduced into
the Parliament on 8 November 2016. It passed both Houses without
amendment on 21 February 2017. The Act received assent on 1 March
2017.
As at the date of preparation of this paper the commencement date is
unknown. Given the scope of the changes it is hoped there will be a
significant lead time (perhaps several months) to allow industry to
prepare for the changes.
The (tortuous) pathway to reform
On 14 April 2008 the Government issued a discussion paper entitled
“Issues Affecting The Retail Leasing Industry in NSW”. One section of the
paper (Appendix B) discussed topics which may form the basis of a future
Retail Leases Regulation:
The Discussion Paper identified three new topics which may be included in
the Act for the first time, and numerous topics covered in the current Act
which might be subject to amendment including:
• the statutory appointment of a Retail Advocate;
• mandatory education for retail tenants;
• access and charging arrangements for parking
facilities;
• the time period for bringing pre-lease
misrepresentation claims;
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• remedies for non-disclosure or incomplete
disclosure;
• the provision of disclosure statements when an
agreement to lease has been entered into;
• registration of leases and lease documentation;
• fit-outs;
• outgoings;
• alterations and relocation;
• landlord use of advertising or promotional funds
contributed by tenants;
• introduction of competition or change of tenancy
mix in a shopping centre;
• strata schemes causing significant disturbances to a
tenant’s business;
• failing businesses in statutory five year leases;
• bank guarantees;
• the passing on of land tax to tenants;
• end of lease issues;
• damaged premises;
• unconscionable conduct and unfairness;
• retail advisers;
• the conduct of parties in mediation; and
• the monetary jurisdictional limit of the Tribunal.
The 2008 Discussion Paper raised a number of possibilities which, if
carried through into legislation, would have dramatically shifted the
balance of power in the landlord-tenant relationship in favour of the tenant.
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A Government response to the comments on the Paper (finally) issued in
January 2011 in the form of a Consultation Draft of a Retail Leases
Amendment Bill 2011. Comments were required by 11 February 2011. The
Overview of the Bill indicates far-reaching changes, some of which were
not contemplated in the 2008 Discussion Paper. The Overview provisions
are set out below:
(a) to simplify the procedures for the various disclosure statements
that lessors and lessees are required to provide under the principal
Act,
(b) to make it clear that shop premises in an office tower that
forms part of a retail shopping centre are not excluded from the
operation of the principal Act if they are used for a retail shop
business listed in Schedule 1 to the principal Act,
(c) to vary the provisions for a lessor’s disclosure statement to
make it clear that a lessor’s disclosure statement is required when
a lease is renewed and to enable a lessee to require a lessor’s
disclosure statement before exercising an option to renew a lease,
(d) to make it clear that the termination of a lease for a failure to
provide a complete and accurate lessor’s disclosure statement does
not affect a lessee’s right to compensation for a pre-lease
misrepresentation,
(e) to make it clear that when the principal Act applies to a lease,
it continues to apply during holding over by the lessee,
(f) to add the cost of outgoings to the list of costs that a lessee is
not required to contribute to unless the liability is disclosed in the
lessor’s disclosure statement,
(g) to provide that if the lessor and lessee cannot agree on the
maximum cost of, or a formula for calculating the cost of, fit-out
works before the lease is entered into, the maximum cost is to be
determined by an independent quantity surveyor,
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(h) to require all retail shop leases that are for a term of 3 years or
more to be registered under the Real Property Act 1900 and to
include a summary statement for the lease,
(i) to make it clear that the decision to enter into a retail shop lease
for a term of less than the minimum 5 years is at the discretion of
the lessee,
(j) to provide for the publication of guidelines for the assistance of
the parties to a retail shop lease in connection with arrangements
for providing a bank guarantee as security for the performance of
the lessee’s obligations under the lease,
(k) to make it clear that a prohibition against a lease containing a
provision that prevents or limits a rent decrease when rent is
adjusted extends to a rent adjustment that occurs on the exercise
of an option to renew,
(l) to prohibit the recovery from a lessee of any outgoings
attributable to land tax,
(m) to allow a specialist retail valuer to require a lessor to provide
an updated lessor’s disclosure statement for the purposes of a
valuation of current market rent,
(n) to increase from 2 months to 6 months the period of notice
required to be given to a lessee of an alteration or refurbishment
that is likely to adversely affect the business of the lessee,
(o) to require a lessor, if practicable, to offer alternative
accommodation of reasonably comparable commercial value
when relocating a lessee, and to enable a lessee to recover the
lessee’s depreciated fit-out costs if the alternative accommodation
offered is not of reasonably comparable commercial value and the
lessee terminates the lease,
(p) to provide that a lessee cannot be required under the lease to
make any repairs or improvements after notice of termination on
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the ground of proposed demolition is given to the lessee (other
than repairs for the purposes of ensuring the safety or security of a
building),
(q) to require a provision of a lease for refurbishment or refitting
by the lessee to specify when it is required and to sufficiently
specify what is required to allow the lessee to make a reasonably
accurate assessment of cost,
(r) to make it clear that it is the responsibility of the lessee to
provide sufficient information to the lessor to enable the lessor to
be reasonably satisfied as to whether any circumstances exist that
entitle the lessor to withhold consent to the assignment of a retail
shop lease,
(s) to simplify the drafting of the procedure to be followed by a
lessee to obtain the consent of the lessor to an assignment of lease,
(t) to entitle a lessee after the end of a retail shop lease to a refund
of unexpended contributions made by the lessee towards
advertising and promotion of a retail shopping centre,
(u) to increase the monetary limit on the jurisdiction of the
Administrative Decisions Tribunal (subsequently absorbed into
NCAT) for claims arising under the principal Act from $400,000
to $750,000,
(v) to change the current requirement that the Tribunal must be
assisted by members with lessor and lessee experience when
hearing a retail lease matter, so that the requirement will only
apply in any case that the Tribunal considers it appropriate,
(w) to clarify the operation of provisions that impose a time limit
on when certain claims can be made under the principal Act,
(x) to provide that the Registrar of Retail Tenancy Disputes may
receive and investigate complaints about the conduct of a party to
a retail shop lease,
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(y) to provide that a court is to have regard to an industry code of
practice prescribed by the regulations for the purposes of
establishing accepted practices and interpretations within the
industry concerning the leasing of retail shops,
(z) to provide for the issue of penalty notices for offences under
the principal Act or the regulations,
(aa) to provide a statement of the objects of the principal Act,
(ab) to require a further review of the principal Act in another 7
years,
(ac) to enact consequential savings and transitional provisions and
to make miscellaneous minor amendments.
To take two examples of topics not canvassed in the 2008 Discussion
Paper which may be problematic, consider a prohibition on a lessor passing
on land tax as an outgoing, and a requirement to register every lease which
has a term of three years or more (a subtly different regime to that under
the Real Property Act 1900).
The Government changed in March 2011. The Consultation Draft
progressed no further.
The 2013 Review
In late 2013 the Government issued a discussion paper entitled 2013
Review of the Retail Leases Act 1994. Comments on the paper were due
by 7 February 2014. As was the case with previous discussion papers and
the 2011 consultation draft amending Bill discussed above, the paper is
wide-ranging. I set out below the Table of Contents:
1.1 Information Asymmetry – How to know if it is a good deal
1.2 Information asymmetry – Turnover Data
2.1 Outgoings – Market Rates
2.2 Outgoings – Advertising and Promotion
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2.3 Outgoings – Land tax
2.4 Outgoings – Not disclosed
2.5 Outgoings – Environmental Upgrade Agreements
3.1 Fidelity of the bargain – Franchisee sub-lease/licence
3.2 Fidelity of Bargain – Strata
3.3 Fidelity of Bargain – Anti-avoidance
3.4 Fidelity of the bargain – Damaged Premises
3.5 Fidelity of the bargain – Right of first refusal, end of lease
4.1 Streamlining/simplification – Standard Lease
4.2 Streamlining/simplification – Appointment of Specialist
Retail Valuers
4.3 Streamlining/simplification – Registration of Leases
4.4 Streamlining/simplification – Disclosure statements
4.5 Streamlining/simplification – Mortgagee consent fees
5.1 Fair Dealings – Test of Good Faith
5.2 Fair Dealings – Bank guarantees
6.1 Coverage of the Act – Definition/List
6.2 Coverage of the Act – Inclusions/ Exclusions
6.3 Coverage of the Act – Publicly listed companies
7.1 Reduce prescriptive regulation – Minimum Term
7.2 Reduce prescriptive legislation - Assignment
7.3 Reduce prescriptive legislation – Termination for
inadequate sales prohibited
8.1 Technical Issues – Regular Review of the Act
8.2 Technical issues- Operation of the ADT
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8.3 Technical Issues – Remedies and penalties in the Act
8.4 Technical Issues – Online Sales
8.5 Technical Issues – Minor Drafting Issues
8.6 Technical Issues – Regulation working as intended?
To pick a few of the topics which might be of greatest interest to
practitioners from the Discussion Paper (with edited extracts from the
Discussion Paper):
Item 1.1 Information Asymmetry – How to know if it is a
good deal
The PC Report 2008 recommended that a summary sheet of
information be included in lease documentation lodged in a
publically (sic) assessable site. Other jurisdictions including
Queensland are considering information asymmetry issues.
Source: PC Report 2008
1.1.a. Is the confidentiality of the financial arrangements
between the parties more important than the provision of
industry information?
1.1.b. If not, how best could the whole of the financial
arrangements of the lease be made publically (sic)
accessible?
1.1.c. If information were required to be registered, how
should updated side deals be dealt with?
Item 2.2 Outgoings – Advertising and Promotion
A number of stakeholders have expressed concerns about the
use of advertising and promotion funds.
The landlord is required to provide an audited report on
expenditure. Auditors are required to report that the funds
were spent and do not provide commentary or analysis of the
‘value for money’ or effectiveness of the expenditure.
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2.2.a. Are the current requirements for marketing plans, six
monthly expenditure statements, advertising statements
and auditor’s reports appropriate and necessary (an
opportunity to reduce red tape)?
2.2.b. Is the current regulation for the use of advertising and
promotion funds working well?
2.3 Outgoings – Land Tax
Tenant representatives have submitted that land tax is an
ownership expense rather than an operating expense and
therefore should not be recoverable from the tenant as an
outgoing.
Landlords in Western Australia and Tasmania are able to
recover land tax. Conversely, landlords in Victoria,
Queensland and South Australia are prohibited from
recovering land tax from tenants. The Northern Territory and
the Australian Capital Territory do not charge land tax on
commercial properties.
Source: State Retail Leases Legislation
2.3.a. Would there be a benefit or detriment if landlords are
prohibited from recovering land tax from tenants?
2.4 Outgoings – Not disclosed
Where a Disclosure Statement is not provided, the right to
terminate the lease may not be an effective outcome. The
landlord may have made a genuine administrative mistake or
the tenant may have made significant investment in the fitout
or franchise agreement.
The Administrative Decisions Tribunal (ADT) has asked that
there be a broader range of options for dealing with this
situation.
Source: Prior OSBC discussions with the ADT
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2.4.a. Is the disclosure regime working as intended? Please
provide recommendations of how it can be improved.
2.4.b. Should the Act provide a wider range of remedies if a
landlord or tenant does not provide a Disclosure Statement
as required?
2.4.c. Should the minimum time for providing the Disclosure
Statement of 7 days before the lease commences be reduced
if both landlord and tenant are legally represented and
request the option?
2.4.d. Where a lease requires a tenant to pay “strata levies”
should any special levy, extra levy or sinking fund have to be
specifically disclosed (these levies can be significant amounts
such as for major capital works to the strata property)?
The full Discussion Paper is available at
http://www.smallbusiness.nsw.gov.au/__data/assets/pdf_file/0011/34976/R
etail-Discussion-Paper-Web.pdf
In August 2012 the Opposition introduced a Retail Leases Amendment
(Mediation) Bill 2012 which proposed to amend section 68(1) of the Act.
The section currently provides:
(1) A retail tenancy dispute or other dispute or matter referred to in
section 65 (1) (a1) may not be the subject of proceedings before any
court unless and until the Registrar has certified in writing that
mediation under this Part has failed to resolve the dispute or matter
or the court is otherwise satisfied that mediation under this Part is
unlikely to resolve the dispute or matter.
The proposed amendment was in these terms:
(1) Proceedings in relation to a retail tenancy dispute or other
dispute or matter referred to in section 65 (1) (a1) may not be
commenced in any court unless the Registrar has certified in writing
that mediation under this Part has failed to resolve the dispute or
matter.
The Bill did not progress beyond a second reading in the Legislative
Assembly.
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The 2016 Bill
The Explanatory Note to the Bill gives an indication of the scope of the
amendments:
(a) to confer a right to compensation on a lessee who terminates a retail
shop lease during the first 6 months pursuant to the current right of the
lessee to terminate in certain circumstances,
(b) to require 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,
(c) to require the registration of a retail shop lease that is for a term of
more than 3 years (or that is required by the terms of the lease to be
registered) and to require lodgment for registration within 3 months
after the lease is executed,
(d) to exclude premises used wholly for certain non-retail purposes
from the scope of the Act (including ATMs, vending machines, public
telephones, children’s rides, internet booths, private post boxes and
certain storage uses),
(e) to 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,
(f) to remove the requirement for a 5-year minimum term for retail
shop leases,
(g) to require a lessor to return a bank guarantee to the lessee within 2
months after the lessee has performed all obligations secured by the
bank guarantee,
(h) to revise and clarify the definition of outgoings in the Act and to
extend the definition to include fees charged by a lessor for services
provided by the lessor,
(i) to allow a retail shop lease with the approval of the Registrar of
Retail Tenancy Disputes (the Registrar) to impose requirements for
police and security checks on the persons who can be employed in or to
do work at a retail shop,
(j) to make it clear that lessee protections under the Act in relation to
termination on the grounds of proposed demolition of the building of
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which a retail shop forms part extend to proposed demolition of any
part of the building and that termination on the grounds of proposed
demolition is only permissible when demolition requires vacant
possession of the shop,
(k) to change the restriction on when a disputed security bond can be
released from a fixed period of 14 days after a judgment to the period
within which an appeal against the judgment may be exercised,
(l) to increase the monetary limit on the jurisdiction of the Civil and
Administrative Tribunal (the Tribunal) for claims arising under the Act
from $400,000 to $750,000,
(m) to expand the grounds on which the Tribunal can order the
rectification of a retail shop lease (currently limited to when the parties
consent) to include correction of a mistake, giving effect to the
intention of the parties or reflecting the actual disclosure of information
between the parties, and to extend the rectification power to
rectification of a disclosure statement,
(n) to provide for specialist retail valuers (who determine current
market rent when the parties cannot agree) to be appointed by the
Registrar rather than the Tribunal, and to make it clear that experience
and training requirements for specialist retail valuers can be prescribed
by the regulations,
(o) to clarify the procedure to be followed by a lessee to obtain the
consent of the lessor to an assignment of a retail shop lease and
protection from liability to the lessor after assignment,
(p) to provide that where a retail shop lease has been awarded by public
tender, consent to assignment of the lease can be refused if the assignee
fails to meet any criteria of the tender,
(q) to provide that for the purposes of the determination of rent by
reference to turnover, turnover does not include turnover from online
transactions (with limited exceptions),
(r) to provide that a lessee cannot be required to provide information to
the lessor about turnover from online transactions (with limited
exceptions),
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(s) to repeal provision for the payment of interest on lease security
bonds deposited with the Secretary,
(t) to provide for the issue of penalty notices for offences under the Act
or the regulations,
(u) to provide for the establishment of an online retail bond service by
the Secretary,
(v) to clarify the application of the Act to shops that are stalls in a
market so that the Act will not apply to stalls in a market except a
permanent retail market and to allow the regulations to modify the
operation of the Act in relation to shops in a permanent retail market,
including by providing for a mandatory code of conduct for lessors and
lessees,
(w) to remove an unnecessary exception from the Act for premises in
an office tower that forms part of a retail shopping centre (on the basis
that an office tower above a retail shopping centre does not form part of
the retail shopping centre),
(x) to enact consequential savings and transitional provisions and to
make miscellaneous minor amendments.
Key issues in the 2017 amending Act
Section 3 – definition of “lease preparation expenses”
Omit “, except for registration fees under the Real Property Act 1900”.
Insert instead “including expenses incurred in connection with
obtaining the consent of a mortgagee but does not include registration
fees under the Real Property Act 1900”.
[Note the EM describes this as a “clarification”.
Might it have been useful to have also dealt with obtaining the consent
of a head lessor explicitly?]
The stalls in a market are not “a cluster of premises” for the
purposes of determining a “retail shopping centre” (but see s 6B).
New subsection 3(2):
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(2) A reference in this Act to the lessor or the lessee, in the context of
a provision that has application to a proposed retail shop lease, includes
a reference to the proposed lessor or proposed lessee.
New section 3A: Definition of “outgoings”
(1) In this Act, outgoings means the following:
(a) a lessor’s outgoings on account of expenses attributable to the
management, operation, maintenance or repair of the retail shop
building or land,
(b) a lessor’s outgoings on account of rates, taxes, levies, premiums or
charges payable by the lessor because the lessor is the owner or
occupier of the retail shop building or land or is the supplier of a
taxable supply (within the meaning of the A New Tax System (Goods
and Services Tax) Act 1999 of the Commonwealth) in respect of the
retail shop building or land,
(c) fees charged by a lessor for services provided by the lessor in
connection with the management, operation, maintenance or repair of
the retail shop building or land.
(2) In this section, retail shop building or land means the building in
which the retail shop is located or (in the case of a retail shop in a retail
shopping centre) any building in the retail shopping centre, and
includes any areas used in association with any such building.
Section 3B:
(1) This Act applies to and in respect of an agreement to lease in the
same way as it applies to and in respect of a lease.
(2) When a lease (the resulting lease) is entered into pursuant to an
agreement to lease:
(a) a lessor’s disclosure statement given for the agreement to lease is
deemed to have been given for the resulting lease, and
(b) a separate lessor’s disclosure statement is not required or permitted
to be given for the resulting lease.
Retail markets – new s 6B:
(1) This Act does not apply to a retail shop that is a stall in a market
unless the market is a permanent retail market.
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(2) A permanent retail market is an assemblage of stalls, styled or
described as a market, that are predominantly used for retail businesses
and that operate in a building or other permanent structure the sole or
dominant use of which (or of the part in which the market operates) is
the operation of the market.
Note.
A stall in a permanent retail market is not a retail shop to which this
Act applies unless it satisfies the definition of retail shop in section 3.
The Regulations can modify the operation of the Act for the purposes
of this section, and can prescribe a mandatory code of conduct.
Section 11 (1) (Lessor’s disclosure statement) and s 11A(1)
(lessee’s DS) redrafted and simplified.
New section 11 (2A) entitling lessee terminating for breach of the
section to recover compensation.
Amended section 11(6): parties to the lease can amend the
disclosure statement by written agreement.
Minor amendments to section 12.
New section 12A – lessee not required to pay outgoings unless
amount disclosed in disclosure statement; limitations where
“estimates” used.
Current sections 15 and 16 omitted.
New s15 Lessee to be provided with executed copy of lease
(1) A retail shop lease is taken to include a provision to the effect that
the lessor must provide the lessee with an executed copy of the lease
within 3 months after the lease is returned to the lessor or the lessor’s
lawyer or agent following its execution by the lessee.
(2) That 3-month period is to be extended for any delay attributable to
the need to obtain any consent from a head lessor or mortgagee (being
delay not due to any failure by the lessor to make reasonable efforts to
obtain consent).
16 Certain leases must be registered
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(1) If a retail shop lease is for a term of more than 3 years or if the
parties to the lease have agreed that the lease is to be registered, the
lessor must lodge the lease for registration in accordance with the Real
Property Act 1900 within 3 months after the lease is returned to the
lessor or the lessor’s lawyer or agent following its execution by the
lessee.
Maximum penalty: 50 penalty units.
(2) The 3-month period within which a lease must be lodged for
registration is to be extended for any delay attributable to:
a) the need to obtain any consent from a head lessor or mortgagee
(being delay not due to any failure by the lessor to make reasonable
efforts to obtain consent), or
(b) requirements arising under the Real Property Act 1900 that are
beyond the control of the lessor.
(3) For the purposes of this section, the term of a retail shop lease
includes any term for which the lease may be extended or renewed at
the option of the lessee.
New section 16BA: Lessor must return a bank guarantee “within 2
months (the maximum return period) after the lessee completes
performance of the obligations under the lease for which the bank
guarantee is provided as security.”
Maximum penalty: 50 penalty units.
Compensation payable by the lessor in specified circumstances.
Sections 19 and 19A omitted (incorporated into section 31).
Section 20(1) – additional exclusion from “turnover”:
the amount of revenue from online transactions, other than online
transactions where the goods or services concerned are delivered or
provided from or at the retail shop (or the retail shopping centre of
which the shop forms part) or where the transaction takes place while
the customer is at the retail shop (whether or not the goods or services
concerned are delivered from or at the retail shop).
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Section 31 – incorporates former sections 19 and 19A; powers
formerly vested in Tribunal now reside with the Registrar.
Appointment of specialist retail valuers now in s 32B.
Sections 41 and 41A have been recast:
41 Procedure for obtaining consent to assignment
The following procedure applies to the assignment of a retail shop lease
that requires the consent of the lessor:
(a) A request for the lessor’s consent to an assignment of the lease
must be made by the lessee in writing.
(b) The lessee must provide the lessor with such information as the
lessor may reasonably require to be satisfied that the financial resources
and retailing skills of the proposed assignee are not inferior to those of
the lessee.
(c) The lessee must provide the proposed assignee with an updated
lessor’s disclosure statement (comprising a copy of the lessor’s
disclosure statement given to the lessee in respect of the lease together
with details of any changes that have occurred in respect of the
information contained in that disclosure statement since it was given to
the lessee).
(d) For the purpose of enabling the lessee to provide the proposed
assignee with the required updated lessor’s disclosure statement, the
lessor must provide the lessee with an updated lessor’s disclosure
statement within 14 days after being requested to do so by the lessee.
(e) If the lessor fails to provide the updated lessor’s disclosure
statement, it is sufficient compliance with the requirement to provide
the proposed assignee with an updated lessor’s disclosure statement if
the lessee instead provides a lessor’s disclosure statement completed by
the lessee to the best of the lessee’s knowledge (but with information as
to current outgoings in place of information as to estimated outgoings).
(f) The lessor must deal expeditiously with a request for consent to
assignment of the lease.
(g) The lessor has 28 days (the decision period) to decide whether to
consent or to refuse consent to assignment. The decision period starts
from when the request for consent was made by the lessee or from
when the lessee has complied with the requirements of this section
(whichever is later).
(h) The lessor is taken to have consented to assignment if the lessee
has complied with this section and the lessor has not, within the
decision period, given notice in writing to the lessee either consenting
or withholding consent to assignment.
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(i) The regulations may prescribe a period that is to replace the period
of 28 days as the decision period in this section.
41A Protection of assignor of lease for ongoing business
(1) A person (the assignor) who assigns a retail shop lease in
connection with the continued use of the shop for the conduct of an
ongoing business has no liability to the lessor in respect of amounts
payable under the lease by the assignee after the lease is assigned if the
lessee complies with the requirements of this section.
(2) The assignor must, at least 7 days before the assignment of lease:
(a) provide the assignee with an updated lessor’s disclosure
statement (comprising a copy of the lessor’s disclosure statement given
to the assignor in respect of the lease together with details of any
changes that have occurred in respect of the information contained in
that disclosure statement since it was given to the assignor), and
(b) provide the assignee with an assignor’s disclosure statement in or
to the effect of the form set out in Part A of Schedule 2A, and
(c) provide the lessor with a copy of the assignor’s disclosure
statement (as provided to the assignee for the purposes of paragraph
(b)) together with a document signed by the assignor and assignee that
is in or to the effect of the form set out in Part B of Schedule 2A
(the disclosure confirmation).
(3) For the purpose of enabling the lessee to provide the proposed
assignee with the required updated lessor’s disclosure statement, the
lessor must provide the lessee with an updated lessor’s disclosure
statement within 14 days after being requested to do so by the lessee,
but if the lessor fails to do so:
(a) it is sufficient compliance with the requirement to provide the
proposed assignee with an updated lessor’s disclosure statement if the
lessee instead provides a lessor’s disclosure statement completed by the
lessee to the best of the lessee’s knowledge (but with information as to
current outgoings in place of information as to estimated outgoings),
and
(b) the assignor and assignee can sign the disclosure confirmation on
the basis that the lessor’s disclosure statement completed and provided
by the lessee constitutes the updated lessor’s disclosure statement.
(4) The protection from liability afforded by this section to the
assignor extends to any guarantor or covenantor of the assignor.
(5) The assignor (and any guarantor or covenantor of the assignor) is
not entitled to the protection of this section if the assignor’s disclosure
statement contains information that is materially false or misleading.
Retail Leases Amendment (Review) Act 2017 Tony Cahill
– 19 –
New s 47 limiting the power of the landlord to compel the tenant to
provide information regarding online transactions (except in the
limited circumstances set out in s 47(2)),
Tribunal given jurisdiction to deal with rectification claims (s
72AB).
Increased monetary jurisdiction to $750,000 (s 73).
Penalty notices regime (new s 83A).
Amended disclosure statements (Sch 2),
Schedule 1A lists uses excluded from the operation of the Act:
Automatic teller machine
Car parking (not being car parking provided as part of the business
of a car park)
Children’s ride machine
Communication towers
Digital display screens
Display of signage (not including the use of premises from which
signage is sold)
Internet booth (not being an internet cafe or similar use)
Private post boxes
Public tables and seating
Public telephone
Renewable energy generation
Renewable energy storage batteries
Self-storage units
Storage of goods for use or sale in a retail shop (not including
storage on premises from which goods are sold)
Storage lockers
Vending machine
* * * * *