If you have a retail lease in Queensland, your lease will be regulated by the Retail Shop Leases Act 1994 (the act). The act provides certain regulations and protections for tenants. Both landlords and tenants must comply with these provisions. This article will set out:

  • the key provisions of the act; and 
  • what you need to know as a retail tenant in Queensland.

Disclosure Statements 

At least seven days before you enter into a retail lease in Queensland, the landlord must give you a disclosure statement. If you are renewing your lease, the landlord must give you an updated disclosure statement within seven days after you exercise your option to renew. Similarly, at least seven days before you enter into the lease, you must give a lessee’s disclosure statement to the landlord.

If the landlord fails to comply with its disclosure obligations, or if the disclosure statement you receive is incomplete or contains false or misleading information, then you may terminate the lease by giving notice within six months of entering into the lease.

You can waive the landlord’s seven-day time period if both parties agree to do so.

If you are receiving the lease under an assignment or transfer of lease, there are additional obligations on both you and the assignor (i.e. the person assigning the lease to you) to provide disclosure statements to:

  • each other; and 
  • the landlord.

Legal and Financial Advice Reports

If you are a tenant with fewer than five retail businesses, you must give the landlord a: 

  • financial advice report; and 
  • legal advice report

This means that you must obtain financial advice from a qualified accountant and legal advice from a solicitor before entering your lease. You must provide both signed reports to the landlord prior to the commencement of your lease term.  

Rent and Rent Reviews

Rent cannot be reviewed more than once a year and can only be reviewed using one basis. 

For example, this basis could be a: 

The act governs how a market rent review should occur and what it should take into account. As a tenant, you have the right to request an early determination of the market rent if the market rent review is to take place at the commencement of your option term. You can request an early determination of market rent between six to three months before the last date you have to exercise your option.

Outgoings

You will usually be responsible to pay your proportion of outgoings under the lease, which is usually the proportion of the building your premises amounts to. If you are leasing the whole of the land, your proportion of outgoings will be 100%.

The landlord must give you an:

  • estimate of outgoings at least one month before the start of the period to which the estimate relates; and
  • audited annual statement within three months after the end of the period.

If the landlord does not give you an estimate or an annual statement, you are entitled to withhold outgoings payments until you receive them.

Option Terms

If you have an option term under your lease, the landlord must give you written notice of the last date you can exercise your option between six to two months before the option date.

If you do not have an option term under your lease, the landlord is required to give you written notice either offering an extension of the lease or advising you that it does not intend to offer an extension at least six months before the end of your lease.  An offer to renew the lease made under these circumstances cannot be revoked until one month after it is made. You should accept the offer within one month if you intend to do so.

Relocation and Demolition

If your lease contains a relocation clause, the landlord must give you three months notice before requiring you to relocate. You have the right to terminate within one month of receiving this notice. If you accept the new premises to relocate to, the terms of the new lease must have the same terms and conditions of your existing lease for the remainder of your original term, with the rent adjusted to take into account any differences in commercial value. You can ask the landlord to pay for your reasonable costs of relocation.

For example, this could include dismantling and reinstalling any fittings and your legal costs.

If your lease contains a demolition clause, the landlord must give you at least six months notice to terminate. You are entitled to terminate the lease with one month’s notice within this six month period. In this case, the Landlord is liable to pay you reasonable compensation for the fit out of the premises and, if the demolition does not take place, compensation for loss or damage you have suffered due to early termination.

Compensation

In addition to compensation obligations for relocation and demolition, the landlord must also pay you compensation for business disturbance and for giving false and misleading information.

For example, this could include if the landlord:

  • substantially restricts your access to the premises;
  • causes significant disruption to your trading or does not take reasonable steps to prevent significant disruption; 
  • does not rectify, as soon as practicable, any breakdown of plant or equipment under its care; or
  • made false or misleading statements to you, and you entered into the lease on the basis of these statements.

Costs of the Lease

You are not liable to pay the landlord’s legal or other costs in relation to preparing, renewing or extending the lease or for mortgagee consent. If your retail lease requires you to do so, you should remove this clause. However, you will likely still be required to pay any survey fees and registration fees for the lease.

Key Takeaways

Before you enter into a retail lease in Queensland, you should ensure that you are aware of your rights and entitlements under the law as a retail tenant. If you are located in Queensland and have any concerns about your retail lease, please contact LegalVision’s leasing lawyers on 1300 544 755 or fill out the form on this page.

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Lianne Tan
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