Is the lease for Retail or Non-Retail Premises?
Tenants of Retail Premises are entitled to receive the protections in the Retail Leases Act 2003, so Tenants will want to be classified as retail where possible. This is defined as premises used wholly or predominantly for the retail sale or hire of goods or the retail provision of services (subject to some exclusions). The key test is whether the end consumer of the goods or services receives or purchases the product or service (or could do so) in the Premises. Even some seemingly commercial uses can be retail when this test is applied.
IMPORTANT DEADLINES FOR RETAIL PREMISES
Change to Director/Coampany details:
Landlord to provide Disclosure Statement to Tenant
New Lease – no more than 14 days prior to commencement
Renewal of Lease – no less than 21 days prior to renewal
Between 7 – 90 days after commencement
Tenant to give notice if no Disclosure Statement
Tenant to receive copy of executed Lease
Landlord to provide Tenant information in writing before option to renew lease expires
Landlord to notify Tenant when no options remaining
Tenant to exercise option for renewal
Within 28 days of returning executed Lease to Landlord
at least 3 months before the last date that an option to renew the lease may be exercised.
Commonly 3-6 months prior to end of lease term
6 – 12 months before the end of the Lease to either offer a new term or advise that there will be no renewal
N.B. Some non-retail leases may include different terms.
N.B. Duty can now be payable by Tenants to the State Revenue Office on a lease of business premises if money other than rent is paid to the Landlord either on the grant of the Lease or for a transfer of the Lease.
ADDITIONAL PROTECTIONS FOR TENANTS OF RETAIL PREMISES
Minimum 5 year term (including options)
On a rent review, Lease clauses barring reductions of rent are void.
In the event of a dispute (other than for non-payment of rent) the parties must participate in mediation at the Office of the Small Business Commissioner before any legal proceedings can be issued.
Landlord cannot claim:
USUAL LANDLORD’S REFERENCE REQUIREMENTS FOR A TRANSFER OF LEASE
Two Business References (eg. suppliers, previous Landlord, previous Landlord’s agents)
Two Financial References (eg. accountant, bank manager, financial advisor, trade creditor)
Statement of Assets and Liabilities (for both new Tenant’s company and any guarantors offered and usually to be signed by the new Tenant’s Accountant)
USUAL LANDLORD’S RIGHTS TO END THE LEASE
Change to Director/Coampany details:
If Tenant is in default
Landlord gives 14 days notice requiring default to be remedied. Landlord can retake possession of premises for non-compliance with such a notice. The Tenant is entitled to return of their goods in this event.
Landlord can refuse renewal
If Tenant has previously been in default and the Landlord has given written notice
N.B. Special temporary measures applied due to COVID-19. Please contact us for advice suitable for your situation.
The information contained in this app is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
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