What is a retail lease?

The Retail Leases Act 1994 (NSW) applies to leases (and other agreements giving rights of occupation) in respect of a shop in a retail shopping centre, or in respect of any premises where the business being carried on in the premises is one of business prescribed in Schedule 1 of the Retail Leases Regulation 2022 (NSW). The schedule includes a wide range of business types including, for example, restaurants, butcher shops, and hairdressers. There are some exceptions, including cinemas, bowling alleys, skating rinks, and vending machines.

It is important to determine whether the Retail Leases Act will apply. Some of the implications include:

1. A disclosure statement must be given to a prospective tenant at least 7 days before the lease is signed or possession given to the tenant. The statement must include all the information required by the Retail Leases Act. Failure to provide the statement is an offence and may in some cases result in the tenant having a right to terminate the lease or not being liable to pay any outgoings.

2. The outgoings and charges payable by the tenant are limited to certain types of outgoings.

3. The type of and frequency of rent reviews are regulated.

There are many other implications of the Retail Lease Act applying in addition to the above points. It is important to receive legal advice as soon as possible if you are contemplating entering into a lease.