How will changes to the Retail Leases Act affect your business (in NSW)?15 August 2017
The Retail Leases Amendment (Review) Act 2017 (NSW) (the Act) has been passed, meaning significant amendments are on the way for The Retail Leases Act 1994 (NSW). Here's a quick look at what this will mean for your business.
Firstly, all retail leases used to be at least five years long under a statutory requirement, but this is going to be removed as part of the amendment. Interestingly, in the case of franchising, this means tenants and franchisees won't automatically have security of tenure for premises.
Next, lessors will be required to provide comprehensive disclosure of any contributions the tenant is required to make in outgoings—so a lessee's liability for these outgoings will be restricted to those disclosed in the lessor's disclosure statement. Adding to this, the Act provides that outgoings may now include "management, operation, maintenance or repair of the retail shop building or land", significantly increasing potential outgoings for lessees.
Finally, lessors will have three months to return a signed lease, rather than just one. There will also be a statutory requirement imposed for leases of three years or more to be registered within three months of execution or once returned to the lessor. Failure to comply with these provisions, could see you faced with a penalty of up to $5,500 (50 penalty units).
Comment below to let us know your thoughts and how these changes might affect your business.