Retail and Business Tenancies – Special Rules
Useful for: Businesss
In Brief
- This legislation was put in place to provide certainty of terms of retail tenancy agreements and protection for tenants operating in retail settings. The legislation applies to all kinds of agreements that grant occupancy rights to a tenant where the premises is of a type caught by the legislation (not just leases).
- Leases commence on the happening of a certain event (either when both parties have signed, when rent has commenced being paid, or when the tenant has moved in). This protects both parties against the risk of the lease being unenforceable because the other party does not sign.
- The legislation prohibits certain conduct and penalties can apply. The legislation also provides that if the landlord inserts certain clauses into a lease contrary to the legislation, those provisions will be void. The legislation will always prevail to the extent that there is any inconsistency between it and the terms of the lease.
- Conduct that is prohibited by the landlord can include demanding certain of the landlord’s costs in producing the lease document, demanding key money (money other than rent or lawful security for performance) or demanding certain types of outgoings.
- Leases that fall under the legislation should always be drafted by a lawyer, and tenants should always take independent legal advice on the terms, because the legislation affects or changes many of the terms one would expect to see in an ordinary general law commercial lease. The legislation differs from jurisdiction to jurisdiction so it is important that advice be received from a lawyer practising in the State or Territory where the premises is situated.
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