New era for retail leases from 1 July 2017
Media release | 28 April 2017
The NSW Government is encouraging retail landlords and leaseholders to get ready for the introduction of the new NSW Retail Leases Act on 1 July 2017.
Deputy Premier and Minister for Small Business, John Barilaro, said the new Act will create more certainty, transparency and fairness for retail businesses and landlords.
“The NSW Government has worked hard to ensure the changes to the Act are the most progressive, wide-ranging and balanced in Australia. The changes coming into effect on 1 July 2017 are the first significant changes seen in more than a decade,” Mr Barilaro said.
In NSW alone, there are up to 44,500 retail businesses which employ 390,000 people, generating $36 billion in annual sales which make a huge contribution to our local communities and the economy.
“With the retail sector subject to such rapid change it’s critical we make sure the legislation is refreshed and remains relevant,” he added.
The new Act will deliver:
- Increased transparency and certainty about lease deals during negotiations.
- Improved protections including return of bank guarantees and registration of leases.
- Simplifying the process of transferring a retail lease.
The key changes are:
- Need to be crystal clear on leasing costs - if they add any undisclosed costs after signing the lease then they won't be able to claim them.
- Need to be clear on any factors impacting the lease, for instance, legal proceedings, otherwise tenants can terminate and claim compensation.
- Must now register leases that are longer than 3 years within 3 months. If there are delays, landlords must give tenants a copy of the executed lease.
- Must negotiate the term of lease they need from the outset rather than an initial short term lease and then claim a longer term lease when things go well.
- Can use a specialist retail valuer through the Office of the Small Business Commissioner if they can't agree with the landlord on a current market rent.
- Can use the NSW Civil & Administrative Tribunal for issues that can't be resolved through mediation where the claim is $750k or less, saving time and money.
For more information: www.smallbusiness.nsw.gov.au
Download the media release