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Recently the State Government has introduced into Parliament sweeping changes to the laws relating to Retail Leases which are due to become law very soon.
Essentially the changes will affect both sides of the retail leasing arrangement.
So landlords and tenants would be wise to take note of the top 5 changes which will have an impact.
So what are they?
1. No mandatory minimum term
Under the old law a Retail Lease was for a minimum of 5 years unless a certificate by a lawyer was provided effectively waiving this requirement. Under the new law the 5 year minimum term is abolished.
2. Documents to be delivered by landlords to tenants
It is now a requirement, except in certain cases for a signed copy of the lease to be sent to the tenant by the landlord within 3 months of it being returned by tenant to landlord.
It is also now a requirement for a bank guarantee to be returned to the tenant within 2 months of the tenant fulfilling all of the obligations under the lease.
3. Compensation
A tenant will now be entitled to compensation including fit out costs if the tenant terminates the lease in the first 6 months due to the landlord either failing to provide a disclosure statement or providing one which is misleading or not completed.
4. There are substantial amendments relating to outgoings
A tenant now is not obliged to pay for any outgoings not disclosed to be paid in the lessors disclosure statement. Also if the landlord provides an estimate of outgoings and the amount actually charged exceeds that figure the tenant is now not liable to pay the additional actual amount if there was no reasonable basis for the estimate given
5. Mortgage consent fees
It has now been clarified that a landlord cannot pass onto a tenant and mortgagee consent fees.
As you can see these changes will have different impacts on both sides to the equation, so please take the time to get advice from us if you need it now.
There are some other changes which I will address in the next e letter…
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