Retail Leasing Update  New South Wales

Retail Leasing Update
New South Wales

The Retail Leases Amendment (Review) Act 2017 (NSW) was assented to on 1 March 2017. With one exception, it continues a long tradition of nit-picking review, combined with a failure to address necessary reform. Endemic problems with the retail legislation are: a disclosure rigmarole that is so bureaucratic and cumbersome that it fails to provide meaningful disclosure and simply ties the landlord up in knots. The Amending Act has made these problems worse, not better; its spread. The Act requires landlords to treat muscled-up tenants like wood ducks. The Amending Act has not…Read more
Retail Leasing Update  Queensland

Retail Leasing Update

The Retail Shop Leases Amendment Act 2016 (Qld) commenced on 25 November 2016. The amending act resulted from a consultative statutory review of the Act. The amendments are intended to: reduce red tape throughout the QLD retail sector; align the QLD legislation with other jurisdictions; and balance the bargaining positions of landlords and tenants. Excluded tenancies s5A(2)(a) now echoes other jurisdictions in excluding from the application of the Act premises with a floor area of more than 1,000 square metres. Previously, this exclusion only applied if the tenant of the 1,000 square metre…Read more
South Australian retail lease legislation review

South Australian retail lease legislation review

Another day, another retail legislation review. This time the crow-eaters are having a turn. The Moss Review of the Retail and Commercial Leases Act was published in April 2016. The industry is still in the twilight zone where the banana benders live, between enactment and proclamation of the Retail Shop Leases (Amendment Act) 2016. I am not sure who thought it was a good idea to have an indeterminate interregnum between “set” and “go”, but Ian Thorpe will tell you that you can fall off the blocks when the starter holds you too…Read more
Retail legislationMission failure again

Retail legislation
Mission failure again

Sometimes the retail legislation throws in a real curve ball, just to keep you guessing. One of my personal favourites is s17 of the NSW Act (copied in s31 of the Victorian enactment). s31 (1) This section applies to a retail shop lease if: (a) the liability of the lessee to pay rent under the lease commences on the lessee entering into possession of the retail shop … The section goes on to provide that the lessee is not liable to pay rent until the lessor has complied with the lessor’s fitout obligations.…Read more
Entering into the lease The legislation causes more problems than it solves

Entering into the lease
The legislation causes more problems than it solves

I have been working with a client recently on the legislated voodoo around when a lease is “entered into”. In the normal course, a lease transaction will follow an industry-standard process. A shop will be identified by the tenant as suitable. A negotiation will ensue, and oral, in-principle agreement reached on the headline issues. Pausing here, that oral agreement will satisfy the definition of a “retail shop lease” in section 3 of the NSW Retail Leases Act. This provision defines a retail shop lease as (in summary): “any agreement under which a person…Read more
Another retail lease review Just what we need – more money down the drain

Another retail lease review
Just what we need – more money down the drain

Concerned readers will be relieved to learn that the Federal Senate Economics References Committee has handed down its report on the need for a national approach to retail leasing arrangements. (The Report was tabled in March 2015). We need another report on retail lease legislation like we need a dose of genital herpes. Not surprisingly, the Federal Committee thought that a national approach to retail leasing would be a good idea. This was despite robust submissions by The Law Society of South Australia that a national approach was “unnecessary”. The South Australian lawyers…Read more
Retail legislation  The gift that keeps on giving

Retail legislation
The gift that keeps on giving

So many things have annoyed me about the retail legislation since Christmas that it is hard to know where to start. Let me give an example of how the legislation can be manipulated to achieve outcomes for which I hope it was never intended. Relocation In NSW, I have been assisting the owner of an office tower with ground floor retail. The development is a single complex, but it is possible to manage the office and retail components separately. The owner needed to refresh the retail podium. This required substantial work. There was…Read more
Time to defenestrate the five year term

Time to defenestrate the five year term

In 2013 the Small Business Commissioner of New South Wales published a Review of the Retail Leases Act. One of the important issues flagged in the Review questions whether the minimum five year term is still required. The question is important because the minimum five year term sucks a lot of oxygen out of the management greenhouse. I am not sure what informed the decision to legislate for a minimum five year term in the first place, but the thinking seems to have been that tenants sometimes make a significant investment in fit…Read more
Retail Lease Legislation  Yesterday’s Hero

Retail Lease Legislation
Yesterday’s Hero

As shopping centre owners and retailers struggle for traction in the face of significant commercial headwinds, it is important for the industry to find ways of becoming more efficient and competitive. The patchwork quilt of Australian retail lease legislation now hangs like an anchor around the neck of the retail industry. When enacted, between 15 and 20 years ago, the legislation was designed to redress perceived imbalance in negotiating power between landlords and tenants. The legislative framework established minimum standards for lease provisions, and imposed conditions on landlord conduct, designed to protect tenants…Read more
Core trading hours  Making productivity harder

Core trading hours
Making productivity harder

It is hard these days to go past a politician or economist who is not flogging the productivity horse. Businesses are exhorted at every turn to implement micro reforms with the goal of improving their productivity. Try implementing micro reform in the management of shopping centres with the dead weight of the retail legislation hanging around your neck. The regulation of core trading hours is a good example of the way in which the retail legislation tangles up the path to productivity. In New South Wales, the core trading hours of a shopping…Read more
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