Retail Leases Amendment (Review) Act 2017 - AICNSW · 2017-11-13 · Retail Leases Amendment (Review) Act 2017 Tony Cahill _____ Retail leasing reform Retail leases reform in New

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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– 1 –

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;

Retail Leases Amendment (Review) Act 2017 Tony Cahill

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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.

http://www.smallbusiness.nsw.gov.au/__data/assets/pdf_file/0011/34976/Retail-Discussion-Paper-Web.pdf

http://www.smallbusiness.nsw.gov.au/__data/assets/pdf_file/0011/34976/Retail-Discussion-Paper-Web.pdf


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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).

http://www.legislation.nsw.gov.au/

http://www.legislation.nsw.gov.au/


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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.


– 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

* * * * *

Documents

Retail Leases Amendment (Review) Act 2017 - AICNSW · 2017-11-13 · Retail Leases Amendment (Review) Act 2017 Tony Cahill _____ Retail leasing reform Retail leases reform in New