The Retail Leases Amendment (Review) Bill 2016 (NSW) was passed by the NSW Legislative Assembly this week without amendment. As you will appreciate, it still needs to go through the Legislative Council.
In the meantime, set out below is an update on some of the key provisions proposed by the Bill (this list is not an exhaustive list given the significant number of proposed changes in the Bill):
- Lessor disclosure - new requirements in relation to the provision of a lessor’s disclosure statement.
- Disclosure of outgoings - more onerous disclosure requirements on lessors in relation to outgoings, including no requirement for a lessee to pay the amount if it is not disclosed in the lessor's disclosure statement.
- Compensation for non-disclosure - an express right for a lessee to compensation for costs reasonably incurred where a lessee terminates due to a failure by a lessor to issue a disclosure statement or where the disclosure statement is defective.
- No minimum period - the statutory minimum 5 year lease term has been removed.
- Registration of leases - an express requirement to register a lease for a term of 3 years or more within 3 months of execution or return to the lessor. Note the three year period can also be reached by a two year lease with an option to renew of 1 year.
- Agreements to lease - a new section to provide that the 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.
- Turnover exclusion - the exclusion of 'revenue from online sales' from turnover rent calculations. Note 'online sales' is not defined.
- Online sales platform void - a new provision declaring void a provision in a retail shop lease to the extent it requires the lessee to use an online sales platform of the lessor.
- Demolition definition - a new expanded definition of 'demolition' for the purposes of demolition notices issued under the Act.
- ATM/vending machine exclusion - expressly excluding certain premises from the operation of the Act, for example where the use is for an ATM or a vending machine.
- Return of bank guarantees - new provisions regarding bank guarantees (including prior notice and time limits (generally 2 months) around return).
- Specialist valuers - a detailed procedure for the appointment of specialist retail valuers for market rent determinations.
- Owners corporations - additional rights for lessees concerning the conduct of an owners corporation for shops forming part of a strata scheme.
- Additional ground to withhold consent to an assignment - a new provision enabling a lessor to withhold consent to an assignment request where an assignee fails to meet the criteria of a tender if the retail shop lease has been awarded by public tender.
- Increased powers for CAT - new powers for the Civil and Administrative Tribunal in relation to disclosure statements and increased monetary threshold limits as well as a civil penalty regime for contravention of the Act.