The long-awaited changes to the Retail Shop Leases Act
1994 (Qld) came into effect on 25 November 2016 after a six
month preparation period following the passing of the Retail
Shop Leases Amendment Act 2016 (Qld).
These changes apply to existing leases (subject to limited
exceptions) as well as new leases entered into after 25 November
Going forward both landlords and tenants will need to ensure
they understand how the changes impact the terms of their current
leases and make arrangements for future compliance.
Summary of the major changes
Application of the Act
The scope of the Act has changed. The Act does not apply to
with a floor area of greater than 1000m2 (whether or not the
tenant is a listed corporation);
for non-retail uses in multi-level buildings where only 25% or
less of the total lettable area of the relevant level of the
building is used for retail purposes;
for non-retail uses in a single-level building where only 25%
or less of the total lettable area of the building is used for
The Act has been clarified by expressly providing that the Act
does not apply to leases for ATMs and vending machines.
Landlords must now provide disclosure statements to a tenant
within 7 days of the exercise of an option to renew. The tenant may
withdraw from the option within 14 days of receipt of the
Tenants and assignees may now waive the benefit of disclosure
Outgoings and rent review
Outgoings may only be recovered from a tenant if the lease
specifies the outgoings payable by the tenant, how the outgoings
will be determined and apportioned and how the outgoings may be
recovered by the landlord.
Outgoings estimate must be given to tenants one month prior to
start of the accounting period. Tenants may withhold payment of
outgoings until the estimate or audited statement is given.
Outgoings estimates and annual audited statements of outgoings
must contain a detailed breakdown of the administration costs and
fees to be paid to any centre management.
Market rent reviews are to be conducted by specialist retail
valuers on an effective rent basis.
Major lessees can now agree to ratchet clauses and multiple
rent review mechanisms
Refurbishment clauses will be void unless sufficient details of
the nature, extent and timing of the refurbishment required is set
Lease preparation and mortgagee consent costs
In certain circumstances, if a tenant does not proceed with the
lease, the landlord can recover the fees for preparation of the
Landlords are no longer permitted to recover mortgagee consent
costs from tenants.
Things to take away
The new provisions impact all retail leasing arrangements in
Queensland and therefore it is essential that lease precedents and
procedures are updated immediately.
Please contact Paul
Wong (Partner), Michael Mayes (Senior
Associate) or Sarah Baines (Lawyer) if you would like further
information on the new provisions of the Retail Shop Leases
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Kemp Strang has received acknowledgements for the quality of
our work in the most recent editions of Chambers & Partners,
Best Lawyers and IFLR1000.
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