Retail Leases, Leasing & Disclosure Statements
Property & Conveyancing
Expert Legal Advice on Retail Leases
Navigating the complexities of retail leases requires a sophisticated understanding of the legal landscape and a proactive approach to tenant and landlord rights.
At Burgess Thomson, we specialise in offering expert legal advice to individuals and businesses entering into retail leases. Whether you are a first-time retailer or looking to expand your business footprint, understanding the intricacies of retail leases is crucial for securing your business’s future.
Understanding Retail Leases
Retail leases involve renting property used for selling goods or services directly to the public. A retail lease is a legally binding contract between the Lessor and the Lessee, also known as the Landlord and the Tenant, for the Lessee’s use of the Lessor’s premises. These agreements are typically long-term, ranging from six months to twenty-five years, reflecting a significant commitment for both tenant and landlord. If a property is used for selling goods and services to the general public, the lease will likely fall under this category.
Due to their public-facing nature and the volume of transactions, retail leases are subject to stringent regulations which vary by state and locality. In New South Wales, to be certain that your retail shop is covered under the Retail Leases Act 1994 (NSW), it is important to check schedule 1 of the Retail Leases Regulation 2022 (NSW).
Some examples that you will typically find in your local shopping centre include clothing stores, bookshops, pharmacies, takeaway food shops, and supermarkets. Gymnasiums, fitness centres, and small bars with a cap of 120 patrons also fall under the category of retail leases.
The Act will apply to your shop if it is less than 1,000 square metres in size and is for a term of more than six months but less than twenty-five years.
However, it is important to consult the Act as some retail shops are not covered. For example, shops that are larger than 1,000 square metres, are self-storage units, storage lockers, vending machines, or shops that operate within a cinema or bowling alley, or exceed a period of 25 years will not be covered under the Act.
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Key Aspects of Retail Leases
- Long-term Commitment: Retail leases often extend over many years, requiring a robust long-term strategic plan from the tenant.
- Regulatory Framework: These leases are governed by specific retail leasing acts that differ across various regions, providing a layer of protection that is generally more comprehensive than that found in commercial leases.
- Tenant Protections: Retail tenants often enjoy greater protections under the law, including caps on rental increases, minimum standards for lease terms, and specific clauses about the use of the property. Tenants may also have the option to extend their Lease, protecting and enhancing the longevity of their business.
How Burgess Thomson Can Assist with Retail Leases
Expert Legal Guidance
Our legal experts provide comprehensive guidance through the complexities of retail leasing. Our services include:
- Lease Negotiation: We help negotiate the terms of retail leases to ensure they align with your business objectives while protecting your legal and financial interests.
- Disclosure Statements: We ensure that all retail lease disclosure statements are comprehensive and clear, detailing all terms, conditions, and responsibilities to avoid future disputes.
- Regulatory Compliance: Our team stays abreast of the latest regulations affecting retail leases to ensure your lease agreement is compliant with current laws.
Tailored Solutions for Your Needs
Understanding that no two retail businesses are the same, we offer bespoke solutions tailored to the specific needs of your enterprise. Whether you are a small boutique or a large department store, our tailored advice is designed to support your business’s growth and sustainability.
Seamless Integration with Business Strategy
Integrating legal advice with your overall business strategy is vital. Our approach ensures that your retail lease supports your broader business goals, facilitating a smooth operation and the potential expansion of your business.
Why Choose Burgess Thomson for Retail Lease Advice?
- Experienced Retail Lease Specialists: Our team has extensive experience and specialisation in retail leases, providing you with knowledgeable and current legal advice.
- Proactive Legal Solutions: We anticipate potential challenges and provide proactive solutions to mitigate risks associated with retail leases.
- Dedicated Client Service: At Burgess Thomson, we are committed to delivering exceptional service, ensuring we understand your business needs and align our advice to meet these requirements.
- Reputation for Excellence: Known for our thorough and meticulous approach, we have established a reputation for excellence in the legal aspects of retail leasing.
Partner with Burgess Thomson
Entering into a retail lease is a substantial commitment that can significantly impact the success of your business. With Burgess Thomson, you gain a partner who understands the nuances of retail leases and is committed to securing the best possible outcome for you.
Contact us today to learn how our expert guidance can help you navigate your retail lease with confidence.
FAQ's
What is a retail lease disclosure statement?
A retail lease disclosure statement is a document that must be provided at least 7 days prior to the Lease being signed by the Lessor to the Lessee when entering or renewing a Lease. This document outlines critical details about the lease, including the terms, any outgoings, the specific use of the premises, details of the fit-out standards, the rent and the rent review method, trading hours, and the rights and obligations of both parties. If inside a shopping centre, it also provides additional details about the shopping centre.
It serves to ensure transparency and to help tenants make informed decisions before signing a retail lease. It is a means of noting any statements or representations that have influenced decisions to enter the Lease.
Where the retail lease disclosure statement is incorrectly dealt with, there are situations in which the Lessee may terminate the Lease. A Lease may be terminated within 6 months after the Lease was entered into, with the Lessee entitled to recover compensation, where:
- No retail lease disclosure statement was provided; or
- If a retail lease disclosure statement was provided but contained information that was materially false or misleading or was incomplete.
The lease cannot be terminated however, despite the above, if the Lessor acted honestly and reasonably, and the Lessee would not have been impacted if the issue with the disclosure statement had not occurred.
How long are typical retail lease agreements?
Retail lease agreements typically range from 6 months to 25 years, depending on several factors including the location, type of business, and the investment required for the premises. Longer leases may include options for renewal, allowing businesses to maintain continuity at a location. It is important to note that any retail leases that are for a term of three years or more must be registered by the Lessor, within three months of the Lease being signed by both parties.
What protections do tenants have under retail leases?
Tenants under retail leases benefit from various protections that are not as prevalent in other types of leases. These may include limitations on rent increases, protection from eviction without cause, and the right to a minimum lease term. These protections are designed to provide stability to tenants who often invest significant capital into their retail spaces.
Can I negotiate the terms of my retail lease?
Yes, the terms of a retail lease are negotiable. Tenants can negotiate various aspects such as the length of the lease, rent amounts, maintenance responsibilities, and subletting options. It is advisable to seek legal advice from an experienced retail leases lawyer to ensure that the lease terms meet your business needs and offer adequate protection.
What should I do if I encounter a dispute under my retail lease?
If you encounter a dispute under your retail lease, it is important to consult with a legal professional who specialises in retail leasing to explore your options. Methods such as mediation, or legal action can be employed depending on the nature of the dispute.
If, for example, negotiating with the lessor or lessee did not resolve the dispute you then may wish to apply to the NSW Small Business Commissioner. The mediation team provides impartial assistance to help resolve any disputes between lessors and lessees.
You are required to attempt mediation through the NSW Small Business Commissioner before applying to the NSW Civil and Administrative Tribunal (NCAT) for further assistance. If your mediation is unsuccessful or unlikely to be resolved with the NSW Small Business Commissioner, the Commissioner will issue you a certificate which is required before applying to NCAT.
There are requirements for applying to NCAT such as a certificate from the NSW Small Business Commissioner, the dispute must be either a retail tenancy claim or an unconscionable conduct claim, it must have taken place within the last 3 years, and the claim value cannot exceed $400,000.
Burgess Thomson can provide guidance and represent your interests throughout the dispute resolution process to achieve a favourable outcome.
When does a retail lease start?
A retail lease commences on the date specified by the landlord and tenant on the lease agreement. Once the lease is signed by both parties the lease is effective on the commencing date. However, a retail lease can start earlier even before the agreement has been signed. This can take place where the Lessee already has occupation and possession of the premises, and when the Lessee begins to pay rent to the Lessor. A Lessee accepting the keys may also be sufficient enough to start the Lease.
