Retail Shops Act Advice

On 1 January 2013 the amendments to the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (the Act) and the Commercial Tenancy (Retail Shops) Agreements Regulations 1985 (the Regulations) came into effect.

These amendments follow an extensive review of commercial tenancy law in Western Australia and seek to increase disclosure requirements for landlords as well as enhancing security of tenure for, and the negotiating power of, tenants.

Some of the key amendments are:

  • The introduction of a more comprehensive disclosure statement.
  • An amended tenant Guide.
  • The introduction of new provisions which cover misleading and deceptive conduct.
  • An obligation on landlords to provide tenants notice of the date on which an option to renew a retail shop lease is no longer exercisable.
  • A Prescribed Relocation Clause has been included in the amendments which a landlord may include in its retail shop lease to avoid the need to seek approval of the redevelopment provision from SAT.
  • Market rent reviews are no longer to take into account goodwill, structural improvements or alterations carried out, or paid for, by the tenant, and stock, fixtures or fittings that are not owned by the landlord.
  • Landlords are no longer able to pass on costs (including legal costs) relating to the preparation, negotiation or execution of a retail shop lease.  This includes any renewal or extension of a lease.
  • The amendments include provisions that see the requirement of the tenant to refurbish or refit the premises as void unless the clause provides sufficient detail as to the exact nature, extent and timing for the completion of the refurbishment.

If a retail shop lease does not comply with the Act there is a risk that the provisions of the lease will be considered void.  It is of upmost importance that Landlords are aware of the amendments and comply with the Act.