Retail Leases Amendment (Review) Bill 2016 (NSW)

The Retail Leases Act 1994 applies to most retail shop leases in NSW. The NSW parliament has passed legislation to amend the retail leasing regime in NSW. This legislation will mean significant reforms, and will impact both landlords and tenants of retail premises in NSW.

Key changes include:

Abolition of a minimum 5 year term.
Removal of Section 16 of the Act, provides that the landlord is no longer required to offer a tenant a minimum 5 year term.

NCAT now has jurisdiction to hear cases up to $750,000
Previously NCAT (NSW Civil and Administrative Tribunal) was able to hear cases up to $400,000, the rise in the threshold should mean they are able to hear a higher number of cases.

Bank guarantees
The legislation states it is now mandatory for the lessor to return the Bank Guarantee to the tenant within 2 months of the lessee performing all duties covered by the bank guarantee

Mortgage consent fees
The lessee can no longer be charged for mortgage consent fees

More compensation for lessees
Where the lessor did not provide a disclosure statement, the lessee can break the lease within 6 months of the start date and can claim costs reasonably incurred while entering into the agreement and for fit out costs.

Outgoings
If an outgoing is not provided in the disclosure statement the landlord will not be able to recover same.

Now Excluded from the Act
ATMs, vending machines, public telephones, children’s rides, internet booths, private post boxes and certain storage uses.

Gross sales and online purchases
The lessor can only require payment of turnover rent for goods or services where the transaction takes place by the customer at the retail shop or the goods are dispatched from the premises.

Lessor’s Disclosure Statement
The Lessor Disclosure Statement can now be amended prior to or after the lease has been entered into by agreement between the parties or by NCAT.

The commencement date is to be gazetted by parliament and is expected to commence soon.