Legal changes for retail shop owners

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Landlords and tenants of retail shop leases should be aware of recent changes to legislation. The changes could impact new tenancies, as well as existing tenancies where the parties are exercising an option to renew the lease.

Some of the key changes to the legislation include:

  • Landlords will be required to give a new disclosure statement to existing tenants, within 7 days of them exercising their option to renew a lease;
  • A Seller of a business is now required to give the Buyer a copy of the lease and the Assignor Disclosure Statement, before entering into a Business Sale Contract that includes an assignment of lease;
  • A tenant is now legally permitted to withhold payment of the apportionable outgoing until the Landlord provides them with an outgoing estimate or audited statement;
  • Landlords are no longer permitted to pass on the cost of obtaining the mortgagee’s consent to a lease;
  • Tenant’s could be required to pay the Landlord’s legal fees, in circumstances where the tenant has provided the Landlord with a written notice requesting that the final lease be prepared and later decides not to proceed with signing;
  • Tenants will be required to provide the Landlord with a disclosure statement at least 7 days before entering into a lease;
  • The original tenant (the assignor) and its guarantor will be released of any liability under an assigned lease resulting from a breach by the assignee, where the assignor has complied with its disclosure obligations to the assignee; and
  • Refurbishment provisions may be deemed void if the lack specificity in details of the nature, extent and timing of such refurbishments.

Changes to the Retail Shop Leases Act 1994 (Qld)(‘the Act’) will affect leases entered into from 25 November 2016.

It is strongly recommended that Landlords and Tenants seek legal advice before negotiating a new lease or exercising the option to renew an existing lease to ensure full compliance under the Act.


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