The Retail Leases Amendment Act 2020
The Retail Leases Amendment Act 2020 came into effect in September and October 2020. This Act makes a number of significant changes to the rights and obligations of landlords and tenants under a retail lease.
- The tenant must be given a Disclosure Statement and proposed Lease at least 14 days before the commencement date of the Lease.
- If any changes are made to a proposed Lease, whether a new Lease or a renewal of an existing Lease, the landlord must notify the tenant of all changes. There are significant fines for landlords if this is not done.
- If a tenant has an option to renew the Lease, the landlord must notify them of this option 3 months before the last date that the option can be exercised. This notice must contain specific information. If this notice is not given, the tenant’s right to exercise the option to renew is extended to 3 months after the notice is given.
Within 28 days of receiving the notice from the landlord, the tenant can ask for an early market rent review. This is so the tenant can be aware of how much they will pay in rent under the renewed Lease before they make the decision to renew the Lease.
If a tenant does not exercise their right to an early rent review and exercises the option to renew the Lease, there is a 14-day cooling-off period.
- The landlord must return the security deposit to the tenant within 30 days of the end of the Lease. This only applies if the tenant has complied with all its obligations under the Lease, including ‘make good’ obligations to restore the retail premises to an appropriate condition.
- Landlords can now claim the costs of repairing and maintaining the Essential Safety Measures such as smoke detectors, fire extinguishers, sprinklers, exit signs and annual safety inspections if this is included in the Lease. For Leases entered into before 22 September 2020, if the Lease contains a clause passing on these costs, this clause is now valid. However, the landlord can only claim costs incurred after 23 September 2020.
If you are a landlord or tenant and require advice regarding the above changes or any other aspect of your lease, please do not hesitate to contact our Property team.