CHANGES TO RETAIL LEASES ACT DELIVERS LARGELY POSITIVE NEWS FOR LANDLORDS
As of 1 July 2017, numerous changes came into effect under the Retail Leases Act 2017 (NSW).
The removal of the minimum five-year lease term is a welcome change for landlords. However, the onerous conditions placed on landlords to develop accurate annual outgoings budgets has increased the risk of them potentially having to absorb additional costs.
Important changes are included below.
- Minimum five-year lease term removed
- Prohibition on landlords from recovering any outgoings that are not properly disclosed in the Disclosure Statement
- Leases must be lodged for registration with the LPI within three months
- The New South Wales and Administrative Tribunal (NCAT) can now determine retail lease disputes up to $750,000 (increased from previous limit of $400,000)
- Tenants can terminate a lease within the first six months should the landlord either fail to provide a Disclosure Statement within seven days of the lease being entered into or provide a materially false, misleading or incomplete Disclosure Statement
- Landlords must provide the tenant with a copy of the signed lease within three months after the lease has been returned to the landlord by the tenant
- Landlords must return bank guarantees within two months after the tenant has completed their obligations under the lease
- Landlords cannot recharge tenants for mortgagee consent fees
- Online transactions are not included when calculating turnover rent
- Outgoings disclosed in the Disclosure Statement are to be provided for the first year of the lease, not the current financial year
The above points are just a brief summary. For further information, please refer to the following links: