There are several new time frame and administrative requirements that have been imposed under the amendments made to the Retail and Commercial Leases Act 1995 (click here for an overview of what these amendments are). It is imperative that Landlords in particular need to be aware of these requirements, so as to avoid unnecessary legal problems and penalties.
These new requirements include:
- Return of fully executed leases to lessee
- A fully executed copy of the lease must be provided to the lessee within one (1) month of its execution by the lessee.
- Timeframe for registration of lease
- If the lease is to be registered, it must be registered within one (1) month after the lease is returned to the landlord.
- An executed copy of the lease and confirmation of its registration must then be provided to the lessee within one (1) month of registration.
- Return of security bond
- Landlords must return bank guarantees to lessees within two (2) months after completing performance obligations under the lease.
- For example, performance obligations may include any make good requirements under the lease.
- If Landlords fail to comply, penalties can apply. These include:
- a maximum penalty of $8,000.00; and
- potential liability to pay compensation to lessee (for any loss or damage due to landlord’s failure).
- As detailed in our new ‘Ten Commandments of Retail and Commercial Leasing‘ blog, the maximum security bond has increased from four (4) weeks’ rent to three (3) months rent, which is another critical consideration for Landlord’s to keep in mind.
- Provision of the ‘information brochure’ to lessees
- An information brochure must be provided to the lessee before entering into negotiations. The intention of the requirement to provide the booklet is to provide the lessee with upfront general information about commercial leases, in conjunction with the information provided in the disclosure statement.
- The information brochure is published by the Small Business Commissioner. The brochure can be found here: https://www.sasbc.sa.gov.au/files/1395_osbc_retail_leasing_guide_2020_web.pdf
- Service of Disclosure Statements
- Disclosure statements are now required to be signed by the landlord and either personally served, left at last known address, sent by post or email to the lessee.
- The lessee is then required to return an acknowledgement of receipt of the disclosure statement to the landlord within fourteen (14) days of service.
It is critically important that Landlord’s review this information and consider what changes need to be made to their own processes.
If you have any queries as to what these amendments might mean for you, please do not hesitate to contact one of the members of our commercial team on (08) 8212 1077.