Changes to the Retail Leases Act
On 21 February 2017, Deputy Premier and Minister for Small Business, John Barilaro announced that the Retail Leases Amendment (Review) Bill 2016 was passed which will result in significant changes to the Retail Leases Act 1994 from 1 July 2017.
The Bill amends the Act to:
- increase transparency and certainty of the deal during the negotiation stage to ensure landlords must disclose all costs in some detail before the tenant is bound to the lease
- introduce or improve fair protections including returning bank guarantees, registration of leases and returning executed copies of the lease
- increase operational efficiency by simplifying the process of transferring a retail lease and clarifying existing provisions.
As a result of the changes, a Retail Code of Industry Practice will be developed and negotiated by industry to address information asymmetry and encourage the reporting of sales and occupancy costs.
Signatories to the code (namely the Australian Retailers Association, the National Retail Association, the Pharmacy Guild of Australia and the Shopping Centre Council of Australia) represent parties to retail leases inside large shopping centres in order to increase the sharing of information between landlords and tenants.
Enquiries about the code should be directed to the code's signatories named above.
Summary of changes Retail Leases Act review
The Retail Leases Act 1994 regulates the relationship between landlords and tenants of retail shops. The Retail Leases Amendment (Review) Bill 2016 has been passed by Parliament to amend the Act on limited issues.
Industry code of practice
The Act will not regulate of the collection and use of tenant’s turnover data from sales and occupancy costs. This has been addressed through a voluntary code of conduct, Retail Code of Industry Practice—The Reporting of Sales and Occupancy Costs, which has been negotiated by industry to address information asymmetry.
Signatories to the code (namely the Australian Retailers Association, the National Retail Association, the Pharmacy Guild of Australia and the Shopping Centre Council of Australia) represent parties to retail leases inside large shopping centres.