Key Changes to the Retail Leases Act 1994

A number of amendments were made to the Retail Leases Act 1994 by the Retail Leases Amendment (Review) Act 2017.

No minimum Term

The provision mandating a five year minimum term was removed. This means that there is no longer a need for a solicitor’s certificate for leases for a term of less than five (5) years.

Mandatory registration of Lease

If a retail shop lease exceeds a term of 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 within 3 months after the lease is returned to the lessor following its execution by the lessee. There are financial penalties for a failure to comply with this registration requirement. The 3-month period is to be extended for any delay attributable to the need to obtain any consent from a head lessor or mortgagee.

For the purposes of the term, the term includes any option to renew. For example, if the lease provides for a 1 year term with an option to renew of greater than 2 years, the retail shop lease must be registered.

Lessee to be provided with an executed copy of Lease

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 following its execution by the lessee. The 3-month period is to be extended for any delay attributable to the need to obtain any consent from a head lessor or mortgagee.

Lessee not required to pay undisclosed contributions or outgoings

A lessee is not required to pay contributions towards the cost of providing any finishes, fixtures, fittings, equipment or services in or for the shop unless disclosed in a disclosure statement given to the lessee in accordance with the Act.

A lessee is not required to pay outgoings unless disclosed in a lessor’s disclosure statement. If an estimate of outgoings was provided and the estimate is less than the actual amount payable, if there was no reasonable basis for the estimate, then the lessee’s liability is to be reduced to the estimated amount.

NCAT jurisdiction

The New South Wales Civil & Administrative Tribunal (NCAT) (Tribunal) now has powers to make decisions about rectification of leases and disclosure statements, formerly only a Supreme Court remedy where the parties to a retail shop lease sought rectification.

Furthermore, the monetary limit on the Tribunal’s jurisdiction to make an order in respect of a particular retail tenancy claim or unconscionable conduct has been increased to $750,000.

You’ll find that the team at Conditsis Lawyers is here to demystify the leasing process.

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