In the state of Queensland, all commercial retail leases are regulated by the Retail Shop Leases Act 1994 (the Act). The Act provides minimum standards which must be followed. Here is LegalVision’s explanation of the key parts of this legislation to help you enforce your rights as tenants when retail leasing in Queensland.
Legal and financial advice reports
Tenants with fewer than five retail businesses must get a legal advice report and a financial advice report before signing a lease. These documents must be handed to the landlord before the lease begins. The tenant is required to meet with a leasing lawyer to receive advice on the terms and conditions of the lease. You can get this advice online through LegalVision.
What disclosure requirements need to be met to finalise a commercial lease?
Landlord – landlords are required to show the tenant a disclosure statement about the lease. Essentially this document must provide summary information about the proposed lease. The landlord is required to give the tenant this statement at least seven days before the commercial lease agreement is finalised. If the landlord fails to do so, the tenant may be allowed to terminate the lease.
Tenant – the tenant is also required to provide a disclosure statement. This statement must contain information about the tenant’s background in business. This statement also allows you to record details of any representations made by the landlord. If the tenant provides misleading or false information on this statement they might have to pay compensation to the landlord if the landlord suffers loss as a result of these misrepresentations.
Key terms in a commercial retail lease
Permitted use – this term is crucial because it specifies what types of business can and cannot be operated at the premises. Read this term closely to ensure it covers the type of business you intend to operate from the premises.
Key Money – under Queensland legislation a landlord is not allowed to accept or seek payment of key money, which is ‘good-will’ money paid by the tenant for renewing, granting or assigning a lease.
Trading Hours – leases will usually have terms which indicate what trading hours will be allowed. These hours can only be within allowable hours under Queensland legislation – which are Monday to Friday 8am to 9pm and Saturday 8am to 5pm.
Rent – if the tenant and landlord cannot agree on the rent for the premises, a specialist rent valuer can be brought in to determine market rent.
Outgoings – outgoings in a commercial lease are the operating costs associated with the premises.
The commercial lease may stipulate that the tenant is required to contribute to these outgoings. This includes insurance, electricity, local authority rates and centre management rates. Under Queensland law, if a tenant is required to pay outgoings the lease must specify:
- how and which particular expenses will be regarded as outgoings
- how these expenses will be apportioned between the parties
- how the landlord will recover these expenses
When am I entitled to get compensation from a landlord in a commercial lease?
The good news is that in limited circumstances a landlord can be compelled to pay a tenant reasonable compensation for loss or damage. A tenant might be entitled to compensation if the landlord:
- significantly restricts access to the tenant’s shop
- significantly restricts or alters customer access or flow into the shop
- causes a substantial disruption to the tenant’s business
- does not quickly rectify or repair building defects or breakdowns in plants or equipment
- neglects cleaning, maintenance or repainting of the building
- causes the tenant to leave the shop before the end of the lease so the landlord can refurbish or extend the building
- makes an untrue statement or misrepresentation which causes the tenant to enter into the lease
- fails to make the shop available for trading on the date specified in the lease If you believe you might be entitled to compensation because of a breach of a commercial lease by a landlord then please contact a leasing lawyer.