Under current retail lease legislation, a lessor of retail premises is required to provide proper disclosure to lessees. Retail leasing legislation was created to protect those who may not have commercial expertise and are entering into leases with sophisticated property groups and shopping centres. It is important that the lessor meets these requirements, as failure to provide proper disclosure may result in the lease being deemed invalid. For this reason and others, it is very important to speak with a leasing lawyer about the various legal considerations before you even engage in negotiations with a lessor.

Do I fall under retail leasing legislation?

Each state and territory has specific legislation dealing with retail leases. The legal test for determining whether the premises will attract the protection of state specific retail leasing legislation is whether the premises are wholly or predominantly used for selling, hiring or providing goods or services to the public. Each state also has its own exceptions to this general test, which should be discussed with your leasing lawyer.

A lessor’s obligations

A lessor must provide a lessee with all disclosure documents at least 7 days before a lessee enters a retail lease. A lessee will be said to have entered a lease when they take possession or enter an agreement to be bound to the lease. A disclosure document is a brief summary of the lease that outlines information about the property, outgoings and shopping centre (if applicable). A disclosure document includes both a draft lease and disclosure statement. In some states, the disclosure statement must meet the specific form prescribed by legislation. For more information on your obligations in a lease, or those of the lessor, you should contact a leasing lawyer.

Delivery of disclosure documents

There a number of different ways that disclosure may be given. A lessor may affect disclosure through hand delivery, post, or fax. Disclosure will be deemed to have occurred when the documents reach the lessee. Disclosure may also be provided via email if they meet the three requirements of the Electronic Transactions Act 1999:

(i)             Use of a reliable electronic form that maintains the integrity of the disclosure documents;

(ii)           The electronic forms of the document are accessible; and

(iii)          The lessee has consented to disclosure being provided electronically. In this case, disclosure will be given when the email enters the inbox of the lessee.

Conclusion

Make sure you check your state’s specific legislation to ensure you meet the requirements for proper disclosure. It is always advisable to speak with a leasing lawyer before you enter any agreement. Call LegalVision today and one of our leasing lawyers can run you through all the legal requirements when providing (or entering into) a retail lease.

Lachlan McKnight

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