The Retail and Commercial Leases(Miscellaneous) Amendment Act 2019 came into operation on 1 July 2020, giving effect to several significant amendments to the Retail and Commercial Leases Act 1995 (‘the Act’), that all Landlords and tenants should be aware of.
The key amendments are:
- A lease can now move in and out of the operation of the Act, dependant on whether the lease exceeds the rent threshold ($400,000.00) at any time (however, exception can apply and can “lock in” the fact that the Act won’t apply even if the threshold changes)
- Disclosure statements are no longer required to be provided upon a renewal of lease;
- Increase of maximum security bond is permitted under lease from four (4) weeks’ rent to three (3) months’ rent;
- A lessee must, within fourteen (14) days of receipt of service of the disclosure statement, return a signed acknowledgement of receipt of the disclosure statement to the Landlord;
- Landlords must return bank guarantees to lessees within two (2) months after completing obligations under the lease (such as make good). Penalties apply if there is a failure to do so (max $8,000.00);
- Requirement that a fully executed copy of the lease must be provided to the lessee within one (1) month of its execution by the lessee. If the lease is being registered, it must be registered within one (1) month after the lease is returned to the landlord and a signed copy and confirmation of registration must be provided to the lessee within one (1) month of registration;
- Clarification that a five (5) year term will not be created where a tenant holds over for longer than six (6) months;
- Clarification that GST is not included in determining whether the annual rent exceeds the prescribed threshold;
- Public charitable bodies which are registered with the Australian Charities and Not-for-profits Commission (ACNC) are now included and subject to the Act; and
- Amendment to disclosure requirements – landlords are now required to provide an information brochure to tenants as soon as negotiations begin. The information brochure is published by the Small Business Commissioner and can be found here: https://www.sasbc.sa.gov.au/files/1395_osbc_retail_leasing_guide_2020_web.pdf.
If you require further assistance regarding how these amendments may affect your lease, please don’t hesitate to get in contact with a member of the commercial team on (08) 8212 1077.