WHO SHOULD READ THIS
- Landlords, tenants, sublandlords, subtenants, franchisors, franchisees and assignees
THINGS YOU NEED TO KNOW
- From 25 November 2016, the law for retail leasing is changing.
WHAT YOU NEED TO DO
- For landlords – review your leases and procedures to ensure that they comply with the new requirements.
- For tenants – ensure that you are aware of the landlord’s obligations and your rights if the landlord fails to comply.
- Please come along to our twilight workshop at 4pm, Tuesday, 6 December 2016 for a detailed walk through of the changes and guidance on how to complete the new disclosure statements. For more information click here.
From 25 November 2016, amendments to the Retail Shop Leases Act 1994 (Qld) (the Act) will take effect. Below is a snapshot of the things you need to know.
Scope of the Act
1. Leases with a floor area greater than 1,000m2 are not longer captured by the Act as are certain non-retail leases within shopping centres.
2. Disclosure is mandatory for all subletting and franchising, with a head landlord able to recover its costs of issuing a disclosure statement.
3. Renewing tenants must be given a lessor disclosure statement within 7 days of exercising an option, with serious consequences for landlords who fail to comply.
4. An assignor disclosure statement must be provided 7 days before the earlier of seeking landlords consent or entry into the business sale agreement.
5. Ratchet rent reviews are now permitted for major tenants if written agreement is obtained from the major tenant.
6. If a landlord fails to give an outgoings estimate or audited statement, the tenant may withhold payment of outgoings until it is provided. Also, the method for calculating outgoings proportion has changed.
7. Refurbishment obligations are void unless the lease gives particulars of the nature, extent and timing of the refurbishment required.
Release of guarantors
8. Guarantors are released from liability on assignment.
9. A landlord will not be liable to pay compensation for loss or damage where the landlord takes action as a reasonable response to an emergency.
Mortgagee consent fees
10. A landlord cannot pass on the costs of obtaining mortgagee’s consent or complying with the Act to the tenant.