The main amendments incorporated into the Retail Leases Act 2003
The main amendments incorporated into the Retail Leases Act 2003 (Version 4 October 2020) are listed below and came into operation on 1st October 2020.
Expenses relating to the repairs and maintenance of essential services can be recovered from a tenant if disclosed appropriately.
In 2015 a VCAT judge provided an opinion that stated these charges could not be recovered from a tenant, despite being included in the lease and disclosure statement.
Over the years it has been common practise to remove the provision to recover these charges.
If the lease provides for recovery however recently the charges were not recovered, our advice is to include in the next annual statement to the tenant. The amendment to the Act clarifies these costs can be recovered, however the responsibility of complying with the Building Act and Regulations remains
with the landlord.
The Act has been amended to require security deposits to be returned within 30 days (previously required “as soon as practicable).
The landlord must provide a disclosure statement and lease to the tenant at least 14 days before entering a retail lease (previously 7 days).
Renewal of lease
The Landlord must give certain information to a tenant before the option to renew lease expires.
The notice must be issued 3 months before the last date to exercise an option. The notice stating the following
- last date to exercise option
- rent payable for the 1st 12 months of the renewed term
- availability of an early rent review
- availability of a cooling offer period
- any changes to the most recent disclosure statement
If the Landlord fails to give an accurate notice, the last date to exercise option is extended until the notice is served under the same conditions as the current lease.
Early rent review
The tenant has a right to request an early rent review under an option to renew. The tenant has 28 days after receiving the option notice to request an early rent review. In accordance with section 37 of The
Act the cost of appointing a valuer is share equally between both parties.
The tenant must exercise their option before the last date to exercise the option.
Cooling off period
The tenant has a right to a cooling off period. if the tenant has exercised an option and has not requested an early rent review, the tenant can give the landlord written notice in the cooling offer period
that they no longer wish to exercise their option. The tenant has 14 days after exercising the option to exercise this right.