The NSW government is encouraging retail landlords and leaseholders to get ready for the introduction of the new NSW Retail Leases Act on July 1, 2017.
Deputy Premier and Minister for Small Business John Barilaro says the new Act will create more certainty, transparency and fairness for retail businesses and landlords.
“The NSW government has worked hard to ensure the changes to the Act are the most progressive, wide-ranging and balanced in Australia,” he said. “The changes coming into effect on July 1, 2017 are the first significant changes in more than a decade.”
In NSW alone, there are up to 44,500 retail businesses, employing 390,000 people, generating $36 billion in yearly sales, which make a huge contribution to our local communities and the economy.
“With the retail sector subject to such rapid change, it’s critical we make sure the legislation is refreshed and remains relevant,” Mr Barilaro said.
The new Act will:
- Increase transparency and certainty about lease deals during negotiations.
- Improve protections, including return of bank guarantees and registration of leases.
- Simplify the process of transferring a retail lease.
The key changes are:
Landlords
- Need to be crystal clear on leasing costs – if they add any undisclosed costs after signing the lease, then they won’t be able to claim them.
- Need to be clear on any factors affecting the lease, such as legal proceedings, otherwise tenants can terminate and claim compensation.
- Must now register leases that are longer than three years within three months. If there are delays, landlords must give tenants a copy of the executed lease.
Tenants
- Must negotiate the term of lease they need from the outset, rather than an initial short-term lease and then claim a longer-term lease when things go well.
- Can use a specialist retail valuer through the Office of the Small Business Commissioner if they can’t agree with the landlord on a current market rent.
- Can use the NSW Civil & Administrative Tribunal for issues that can’t be resolved through mediation where the claim is $750,000 or less, saving time and money.