Both landlords and tenants have responsibilities when entering into a new lease. This article outlines a landlord’s key responsibilities upon entering into a lease.
Is the Lease Covered by Retail Leases Legislation?
A landlord’s obligations will depend on whether the lease is retail or commercial. Unlike commercial leases, retail leases are governed by state-based legislation (set out below). This article will refer collectively to the various state-based regimes as ‘retail leases legislation’.
|Victoria||Retail Leases Act 2003 (Vic)|
|New South Wales||Retail Leases Act 1994 (NSW)|
|Queensland||Retail Shop Leases Act 1994 (QLD)|
|Australian Capital Territory||Leases (Commercial and Retail) Act 2001 (ACT)|
|Western Australia||Commercial Tenancy (Retail Shops) Agreement Act 1985|
|Tasmania||Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998|
|South Australia||Retail and Commercial Leases Act 1995 (SA)|
|Northern Territory||Business Tenancies (Fair Dealings) Act|
Under retail leases legislation, the landlord has the responsibility to provide the prospective tenant with a disclosure statement at least seven days before signing the lease.
A landlord may also have to provide a prospective tenant with other documents, such as the NSW Retail Tenant’s Guide (for NSW) or the Victorian Small Business Commissioner’s Information Brochure (for VIC).
Lease Preparation and Other Documents
The landlord or the landlord’s lawyer usually prepares the lease and makes any amendments during lease negotiations.
The landlord should also confirm how the tenant must sign the lease (for example, where to sign and how many copies) and provide a list of requirements such as:
- bank guarantee,
- insurance certificate of currency, and
- any other relevant documents.
In some cases, parties must sign a heads of agreement before the lease is prepared. The landlord should also provide any relevant disclosure documents and other documents, such as information brochures.
Lease Preparation Costs
Retail lease legislation generally requires each party to bear their own costs (except in South Australia where the tenant must pay half of the landlord’s legal costs). For commercial (non-retail) leases, however, the landlord has the right to require the tenant to cover its cost in preparing the lease. This is a commercial consideration for parties to negotiate.
Landlord to Register the Lease
Where relevant, the landlord is responsible for registering a lease, however, the tenant is responsible for the registration fees (such as the LPI NSW fees). Registration requirements differ from state to state. For instance, parties do not need to register their lease in Victoria whereas other states will only protect certain short-term leases – anything longer should be registered.
Retail and commercial Leases have different requirements. The landlord is responsible for lease preparations as well as making any amendments to the lease. Parties should consider costs, noting that unlike commercial leases, retail leases legislation regulates this area. Where required, the landlord must register the lease however, the tenant bears the costs. If you have any questions or need assistance reviewing your lease, get in touch with our commercial leasing lawyers on 1300 544 755.
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