Changes to the retail leases act

On the 1st Octo­ber 2020, the Vic­to­ri­an Par­lia­ment passed the Retail Leas­es Amend­ment Bill. This amend­ed the stand­ing Retail Leas­es Act of 2003 and the Build­ing Act of 1993.

There were some sig­nif­i­cant changes that our retail land­lords and ten­ants need to be aware of. To save you the has­sle of find­ing (and try­ing to inter­pret) the infor­ma­tion, we’ll break it down for you in two parts. Part I will be infor­ma­tion for land­lords, and part II will be infor­ma­tion for tenants.

Essen­tial Safe­ty Mea­sures: Land­lords can now recov­er the cost of essen­tial safe­ty repairs or main­te­nance or an instal­la­tion relat­ing to the fit-out of premis­es (that the ten­ant agreed to pay for) onto the ten­ant. This includes Smoke detec­tors, Sprin­kler sys­tems, Fire extin­guish­ers, Fire exit signs or Annu­al safe­ty inspections.

Dis­clo­sure state­ments (for land­lords):
▪You must give a ten­ant a dis­clo­sure state­ment and a copy of the pro­posed lease at least 14 days before enter­ing into a lease agree­ment
▪This replaces the pre­vi­ous time­frame of only 7 days
▪Fail­ure to do so will see the lease com­mence­ment date delayed until 14 days have passed
▪If the lease con­tains changes to the pre­vi­ous ver­sion and you haven’t told the ten­ant about the changes, you’ll face a fine of $41,305 (cor­po­ra­tion) or $8,261 (indi­vid­ual)

Secu­ri­ty deposits (for land­lords):
▪You’re legal­ly required to return a tenant’s secu­ri­ty deposit with­in 30 days of the lease end­ing, replac­ing the pre­vi­ous word­ing of ​‘as soon as prac­ti­ca­ble’
▪This is pend­ing the ten­ant has per­formed all of their oblig­a­tions under the lease
▪This applies to all retail premis­es leas­es entered into from 1 Octo­ber 2020.

Renew­al oblig­a­tions: If the lease has an option to renew, the land­lord, at least 3 months pri­or, must give the ten­ant:
▪The date by which the option to renew must be received
▪The amount of rent payable for the first 12 months of the renewed term
▪Infor­ma­tion about ear­ly rent review and the cool­ing-off peri­od
▪Any changes to the most recent dis­clo­sure statement

If you need fur­ther advice on the Retail Leas­ing Act, feel free to get in touch on 9417 7906 or email­ing katherine@​miglicdean.​com.​au.