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Changes to Retail Shop Leases Act – from 25/11/2016
- Good for tenants, not so good for landlords
On 13/10/2015 a bill amending the Retail Shop Leases Act 1994 (‘the RSLA’) was introduced into the Queensland Parliament, as part a regular statutory review of the Act.
The amending Act was finally proclaimed to come into effect as and from 25/11/2016.
Significant changes legislated include:
1) excluding premises exceeding 1,000 M2 in area from regulation by the Act (previously only excluded if the tenant was a listed company);
2) some non-retail businesses now excluded from the Act, if premises on that level of the building comprise 25% or less retail area;
3) ATM’s, vending machines and various advertising displays will now be excluded from the provisions of the Act;
4) landlords will no longer be entitled to recover the costs of obtaining mortgagee’s consents to leases;
5) currently if the landlord consents to the assignment of a lease by a tenant the tenant is released from liability under personal guarantees, but any guarantors of the tenant are not automatically released. The amending Act provides that such guarantors are also automatically released on assignment. This means that even more care than was previously the case needs to be taken when considering whether to consent to a request from a tenant for consent to assignment of the lease (which consent can generally not be unreasonably refused);
6) currently if the landlord undertakes works to the centre which affect the tenant, the tenant may be entitled to compensation, and the parties cannot agree ahead of time that the tenant will not be entitled to compensation. The amending Act provides that if works are undertaken to the centre within 12 months of the commencement of the lease, and those works have been disclosed to the tenant by the landlord prior to execution of the lease, then the tenant cannot seek compensation for any disruption caused by those works.
The changes to the Act are quite extensive, and will significantly impact landlords of retail premises.
Most provisions are not retrospective, but landlords should be aware of the imminent changes and their likely impact.
If you have any particular queries, or are about to negotiate a lease with a tenant we suggest that you contact us to discuss the impact of the RSLA, and the proposed changes, urgently.
Ken Waddington
Partner
(07) 5443 4866