The NSW Parliament recently passed the Retail Leases Amendment (Review) Bill 2016 (“the Bill”) which has achieved royal assent and is expected to commence shortly. The Bill introduces reforms to the Retail Leases Act 1994 (“the Act”) that governs NSW retail shop leases.
Some of the ways which landlords and tenants will be impacted include:
- Minimum term
The requirement for a minimum lease term of 5 years will be removed.
Leases with a term of more than 3 years will need to be registered. The lease will need to be lodged within 3 months after it is signed.
- Disclosure of outgoings
Landlords will have stricter disclosure obligations for outgoings contributions. A tenant will not have to pay an outgoing if it is not disclosed in the landlord’s disclosure statement.
- Non-retail premises
If a premises is used wholly for non-retail purposes then it will be excluded from the Act. This includes ATMs, vending machines, public telephones, children’s rides, internet booths, private post boxes and certain storage uses.
If a tenant exercises its right to terminate the lease during the first 6 months due to the landlord’s failure to give a disclosure statement or due to a defective disclosure statement, the tenant can recover compensation from the landlord. This includes the reasonable costs of entering into the lease and fitout costs.
- Mortgagee consent fees
Tenants will not be liable to pay the costs of the landlord obtaining mortgagee consent to the lease.
- Return of bank guarantees
Landlords will be required to ...