On 22 February 2017, the Retail Leases Amendment (Review) Bill 2016 was passed through the NSW Legislative Council.
The legislation, upon receiving royal assent, will give effect to the recommendations resulting from the recent statutory review of the Act.
Key amendments include:
- the abolition of the 5-year minimum term for retail shop leases;
- additional right to compensation to a tenant who terminates the lease within the first 6 months for costs reasonably incurred where the landlord did not provide the tenant a disclosure statement;
- exclusion of ATMs, vending machines, public telephones, children's rides, signage display, internet booths, private post boxes and certain storage uses from the operation of the Act;
- requiring landlords to provide full disclosure of contributions to the landlord's outgoings in the landlord's disclosure statement, otherwise contributions will not be recoverable from the tenant;
- requiring the landlord to return any bank guarantee within 2 months after the tenant has performed all obligations secured by the bank guarantee;
- extending the definition of outgoings to include fees charged by a landlord for services provided by the landlord;
- excluding online transactions (with limited exceptions) from the determination of turnover rent;
- clarifying the procedure to be followed by a tenant to obtain the consent of the landlord to an assignment of a retail shop lease; and
- prohibiting the landlord from being able to recover mortgagee consent fees.
Clayton Utz will issue a comprehensive article providing further detail on some of the key changes shortly.
Thanks to Scott Findlay for his help in writing this.