The Retail Shop Leases Amendment Act 2016 (Qld) (Amendment Act) has been passed by the Queensland parliament. It hasn’t commenced as yet and will commence on a date to be proclaimed. Commencement is expected to occur before Christmas 2016.
Both lessors and lessees need to understand the changes.
Lessors need to review and amend their leases and procedures so that they comply with changes as soon as the Amendment Act commences. Leasing agents/managing agents also need to be updated and understand the changes.
Obligations surrounding disclosure requirements are one of the key changes made by the Amendment Act. These include new disclosure requirements and consequences of failure to make disclosure. For example, where a lessee exercises an option to renew in a lease:
The lessor will now have to give a current lessor disclosure statement to the existing lessee within seven days of receipt of the lessee's notice of exercise of the option.
The lessee may within fourteen days of receiving the current lessor disclosure statement, whether or not their renewed lease period has commenced, give the lessor a written notice stating that the notice exercising the option is withdrawn. The lessee does not need to give any reasons.
If the lessor does not give a current lessor disclosure statement or the current lessor disclosure statement is defective the lessee may within six months after the commencement of the option period terminate the retail shop lease.
Further changes include where upon an assignment both the lessee and the lessee's guarantors will now be released from liability where the conditions set out in the Retail Shop Leases Act have been satisfied. Previously the lessee's guarantors weren’t released.
Requirements with respect to recovery of outgoings by lessors have been "tightened". In addition a lessee will have the right to withhold payment of outgoings until the estimate or audited statement is given by the lessor.
The above mentioned changes are only a few of the changes that will occur on the commencement of the Amendment Act. The Amendment Act will have the effect of further regulating retail leasing.