Welcome to Part 3 on changes to the retail shop leasing laws in Queensland. In today’s article we will take a look at a range of provisions, including marketing, compensation, refurbishments, penalties, disbursement and more!
The provisions around marketing are now more transparent. For instance, when the lessor requires its lessees to make marketing contributions to a common fund, the lessee will now be entitled to viewing a detailed marketing plan explaining where and how funds will be spent.
The lessor could put the marketing plan on its website as one method of making it publicly available to the lessees. The lessor will also be required to make available to a lessee an audited statement of whatever funds have been spent on promotions and marketing, and this must be provided no more than 3 months after the accounting period has come to an end. If there are funds left over in the fund, they will be accounted for in the following accounting period.
Another significant amendment is how the compensation provisions will apply. It will be clarified that these provisions do apply to any lessees that ‘hold over’ after a lease has expired.
If a lessee claims compensation over claims the lessor interfered with the quiet enjoyment of the lessee, then the lessee will need to provide the lessor with notice of the disturbance and any loss or damage suffered. This notice should be given as soon as is practicable, as the amount of compensation will differ depending on how long it takes the lessee to give this notice to the lessor.
On the other hand, a lessor will not be liable for loss or damage suffered in situations where it responds:
- In emergency situations; or
- In accordance with obligations under the law or the relevant authority.
Lessors will also be permitted to insert a clause that limits any compensation claim if the claim is for an ‘anticipated disturbance’ which occurs no more than one year after the commencement date of the lease. To ensure the clause is created validly, the lessee must be provided with a notice that:
- Describes what the ‘anticipated disturbance’ is or would be;
- Explains the likelihood of it actually occurring, and how this assessment was reached; and;
- States when and for how long the disturbance would occur, as well as the impact it may have.
Under the Act, the relocation provisions will now broadly apply to any relocation regardless of the reasons for relocating. Lessees will also receive further protection, as lessors will be prevented from relocating lessees to premises outside of the retail centre. If you are a lessee being forced to relocate, the notice period for early termination that is given to the lessor will be increased from one week to one month.
When can the lessor pass on costs to the lessee?
In terms of who pays for what, the lessor will no longer be able to pass on costs to the lessee that relate to the following:
- Getting the consent of the mortgagee to the lease; and
- Remaining compliant with the Act.
If, however, the lessee does not provide its signature on the final version of the lease, the legal costs incurred by the lessor may be recoverable.
Release of guarantors on Assignment
Even if the parties involved in the assignment have not given disclosure, the lessee and its guarantors will be released upon an assignment.
Under the Bill, any provision that requires the lessee to renovate or refurbish will be ineffectual if it does not specify when, how and to what extent the refurbishment is required.
Instead of penalising a party for breaching a provision within the Act, the invalid obligation will no longer have any effect.
If you need to speak with a LegalVision leasing lawyer, or simply wish to get a quote, get in touch with our Client Care team on 1300 544 755.