Recent changes to the Retail Leases Act 2003 (Victoria)
The Retail Leases Amendment Act 2012, assented to on 20 November 2012, brought two important changes to the Retail Leases Act 2003 (‘the Act’):
- landlords are no longer required to notify the Small Business Commissioner of new leases; and
- the previous multi-purpose disclosure statement has been replaced with four disclosure statements.
Repealed requirement to notify the Small Business Commissioner
This amendment repealed the old section 25 requirement to notify the Small Business Commissioner of any new leases.
The Small Business Commissioner Information Brochure, which a landlord is required to give prospective tenants, has also been updated to reflect the new changes to the Act.
The new disclosure statements
The new Retail Leases Regulations 2013 (‘the Regulations’) took effect on 22 April 2013.
One of the major changes of the new Regulations is the replacement of the previous, multi-purpose disclosure statement with four new disclosure statements. These statements are to be used in different scenarios, being:
- Retail premises not located in retail shopping centres;
- Retail premises located in retail shopping centres;
- Renewal of lease; and
- Assigned lease where ongoing business.
Landlords are required to provide prospective tenants with a disclosure statement. Failure to do so may entitle the tenant to withhold rent or terminate the lease.
Choosing the right disclosure statement
Circumstances may arise where a lease falls within two categories, or is on the borderline. How do you choose the right disclosure statement? And what are the penalties for choosing the incorrect one?
There appear to be no additional sanctions, penalties or tenant’s rights introduced with the new Regulations. However, sections 17 and 18 of the Act are still applicable.
Section 17(5) reflects that where a landlord provides information in the disclosure statement which is misleading, false or materially incomplete, the tenant may give the landlord a written notice of termination and terminate the lease.
If a tenant terminates the lease under section 17(5), a landlord may issue a notice of objection in accordance with section 18(1). Grounds for objection are:
- that the landlord acted honestly and reasonably and ought fairly be excused from the contravention; and
- that the tenant is in substantially as good a position if there had been no contravention of the Act.
Landlords should be careful to adapt the correct disclosure statement and provide accurate information. Tenants should be careful to review the statement both before entering into the lease and after the lease has commenced.
Dan Flynn, Partner