In Queensland, retail shop tenancies are subject to the Retail Shop Leases Act 1994 (which we will just call the Act from now on).
The aim of the Act is to promote transparency and equality in the conduct of retail lease transactions in Queensland.
The Act sets out the rights and obligations of tenants and landlords, including certain procedures which must be followed by the landlord on entering into negotiations with a prospective tenant for a retail premises.
The Act applies to most premises that are either situated in a retail shopping centre or those premises used wholly or predominantly for carrying on a retail business specified by the regulations: basically, those businesses engaged in the retail sale of goods or services to the public. It places legal obligations on the landlord in respect of pre-Lease negotiations and post Lease conduct.
Retail businesses which fall under the scope of the Act do not include the business of wholesaling, warehouses, storage units. For these leases, you may need a Commercial Property Lease.
While a landlord has fundamental property rights in connection to their property, the Act seeks to balance these rights with right’s of retail tenants. In particularly, the Act promotes transparency and fair dealing and prohibits the landlord from acting in a way which is unconscionable.
It is important to note that a landlord’s omission to provide sufficient information can fall under the umbrella of unconscionable conduct.
Under the Act, the landlord must provide a Disclosure Statement (available as part of our Kit) to the tenant at least seven days before entering into the lease. The Disclosure Statement sets out key details of the lease, particularly the monetary obligations of the tenant, in a way which is clear and easily apparent. This helps the tenant to understand it’s obligations fully preventing a tenant from being caught unaware later with onerous lease obligations buried amongst the Lease terms and legal jargon.
The landlord must also provide the tenant with a draft copy of the Lease Agreement at least 7 days before entering into a Lease, preventing tenants from being signed up on the spot without the opportunity to fully review and consider the Lease documentation.
A failure by the landlord to provide a Disclosure Statement, or providing a statement that is incomplete or contains false or misleading information, enables the tenant to terminate the lease or avoid specific payments which were not set out within the Disclosure Statement. It may also make the landlord vulnerable to claims for compensation or damages.
The tenant must provide the landlord with their own Disclosure Statement providing the landlord with their full details including their experience in retail leasing and their ability to meet their financial and other obligations of the Lease. This helps the landlord to assess the tenant’s application and provides the lessor with confirmation that the tenant has received a copy of the proposed Lease and Disclosure Statement from the lessor.
In contrast to other Australian states and territories, Queensland does not guarantee the tenant a 5 year minimum term.
Under the Act, landlords cannot ask the tenant to pay the costs of preparing the Lease and Disclosure Statement or ask for key money.
Fortunately, it doesn’t need to be an expensive process for landlords because RP Emery and Associates provide a simple and cost-effective way to implement retail Leases and comply with disclosure requirements.
The Retail Kit gives you all the tools you need to successfully complete a Qld Retail Tenancy Lease without spending thousands on legal fees.
To read more about our Retail leasing Kits click here.