SUMMARY OF
PROVISIONS
PART 1
PRELIMINARY
1.Short title
2.Commencement
3.Interpretation
4.Application of Act
5.This Act overrides leases
6.When the lease is entered
into
PART 2
ADMINISTRATION
7.Administration of Act
8.Ministerial control of
administration
9.Commissioner's functions
10.Immunity from liability
PART 3
BEFORE THE LEASE IS ENTERED INTO
11.Copy of lease to be provided
at negotiation stage
12.Lessee to be given
disclosure statement
13.Certain obligations to be
void
14.Lease preparation costs
15.Premium prohibited
16.Lease documentation
18.Warranty of fitness for
purpose
PART 4
SECURITY
19.Security bond
20.Repayment of security
PART 4A
TERM OF LEASE AND RENEWAL
DIVISION 1CPRELIMINARY
20A.Objects
DIVISION 2CINITIAL TERM OF LEASE
20B.Minimum 5 year term
DIVISION 3CRENEWAL OF SHOPPING CENTRE LEASES
Subdivision 1CApplication of this Division
20C.Application of Division
Subdivision 2CRules of conduct at end of term
20D.Preference to be accorded
to existing lessee
20E.Implementation of
preferential right
20F.Notice of absence of right
of preference
20G.Consequences of failing to
begin negotiations or give notice
Subdivision 3CRemedies for non-compliance with rules
20H.Fair dealing between lessor
and lessee in regard to renewal of lease
DIVISION 4COTHER CASES
20I.Application of this
Division
20J.Notice to lessee of
lessor's intentions at end of lease
DIVISION 5CGENERAL PROVISIONS
20K.Certified exclusionary
clause
20L.Premium for renewal or
extension prohibited
20M.Unlawful threats
20N.Exclusion of legal
consequences for which express provision is not made
PART 5
RENT AND OUTGOINGS
21.Payment of rent when
lessor's fitout not completed
22.Restrictions on adjustment
of base rent
23.Reviews to current market
rent
24.Turnover rent
26.Recovery of outgoings from
lessee
29.Sinking fund for major
repairs and maintenance
30.Land tax not to be recovered
from lessee
31.Estimates and explanations
of outgoings to be provided by lessor
32.Lessor to provide auditor's
report on outgoings
33.Adjustment of contributions
to outgoings based on actual expenditure properly and reasonably incurred
34.Non‑specific outgoings
contribution limited by ratio of lettable area
35.Determination of current
market rent under options to renew
36.Opportunity for lessee to
have current market rent determined early
PART 6
ALTERATIONS AND OTHER INTERFERENCE WITH THE SHOP
37.Lessee to be given notice of
alterations and refurbishment
38.Lessee to be compensated for
disturbance
39.Demolition
40.Damaged premises
41.Employment restriction
PART 7
ASSIGNMENT AND TERMINATION
43.Grounds on which consent to
assignment can be withheld
44.Premium on assignment
prohibited
45.Procedure for obtaining
consent to assignment
45A.Liability of lessee
following assignment of lease
46.Lessor may reserve right to
refuse sublease, mortgage
PART 8
ADDITIONAL
REQUIREMENTS FOR RETAIL SHOPPING CENTRES
50.Part applies only to retail
shopping centres
51.Confidentiality of turnover
information
52.Statistical information to
be made available to lessee
53.Advertising and promotion
requirements
54.Marketing plan for
advertising and promotion
55.Lessor to provide auditor's
report on advertising and promotion expenditure
56.Unexpended advertising and
promotion contributions to be carried forward
57.Relocation
58.Termination for inadequate
sales prohibited
59.Geographical restrictions
60.Associations representing
lessees
61.Trading hours
62.Special provision for strata
and community shopping centres
PART 9
DISPUTE RESOLUTION
DIVISION 1CMEDIATION
63.Responsibility of the
Commissioner to arrange for mediation of disputes
64.Mediation of disputes
65.Stay of proceedings
66.Statements made during
mediation
DIVISION 2CINTERVENTION
67.Power to intervene
DIVISION
3CJURISDICTION OF THE MAGISTRATES COURT
68.Jurisdiction of the
Magistrates Court
69.Substantial monetary claims
PART 10
RETAIL LEASES FUND
70.The Fund
71.Application of income
72.Accounts and audit
PART 11
RETAIL SHOP LEASES ADVISORY COMMITTEE
73.Advisory Committee
74.Functions of Advisory
Committee
PART 12
MISCELLANEOUS
75.Vexatious acts
76.Abandoned goods
77.Exemptions
78.Annual reports
79.Time for prosecutions
80.Regulations
81.Amendment of the Landlord
and Tenant Act
82.Amendment of the Magistrates
Court Act
APPENDIX
LEGISLATIVE HISTORY
The Parliament of
South Australia enacts as follows:
PART 1
PRELIMINARY
Short title
1.
This Act may be cited as the Retail and Commercial Leases Act 1995.
Commencement
2.
This Act will come into operation on a day to be fixed by proclamation.
Interpretation
3.
(1) In this Act, unless the contrary intention appearsC
"accounting period"
means a period fixed as an accounting period in a retail shop lease;
"certified exclusionary
clause"Csee section 20K;
"collateral agreement"
includes a guarantee under which the guarantor guarantees the performance of the
obligations of a lessee under a retail shop lease;
"Commissioner" means
the Commissioner for Consumer Affairs;
"core trading hours"
means the hours for which a retail shop is required under a retail shop lease to
be kept open for business;
"demolition" of a
building of which a retail shop forms part includes a substantial repair,
renovation or reconstruction of the building that cannot be carried out
practicably without vacant possession of the shop;
"disclosure statement"CSee
section 12;
"enclosed shopping complex"
means a group of three or more retail shops under common ownership or management
with a common area through which public access is obtained to all or some of the
shops and which is locked to prevent public access through that area when those
shops are closed for business;
"Fund" means the Retail
Shop Leases Fund;
"lawyer" means a person
entitled to practise the profession of law in the State;
"lessee" means the
person who has the right to occupy a retail shop under a retail shop lease, and
includesC
(a)a
sublessee; and
(b)a
prospective lessee or a former lessee;
"lessor" means the
person who grants or proposes to grant the right to occupy a retail shop under a
retail shop lease, and includesC
(a)a
sublessor; and
(b)a
prospective lessor or a former lessor;
"Magistrates
Court" means the
Civil (Consumer and Business) Division of the Magistrates Court;
"mediation" of a
dispute includes preliminary assistance in dispute resolution such as the giving
of advice to ensure thatC
(a)the
parties to the dispute are fully aware of their rights and obligations; and
(b)there
is full and open communication between the parties about the dispute;
"outgoings" means a
lessor's outgoings on account of the expenses of operating, repairing or
maintaining the retail shop or a retail shopping centre in which the retail shop
is located (including rates, taxes, levies, premiums or charges payable by the
lessor) but does not include outgoings which are directly proportional to the
level of a lessee's consumption or use and for which the lessee is required to
reimburse the lessor under the lease;
"party" means the
lessor or the lessee under a retail shop lease;
"premium" means money
paid, or a benefit given, to or as directed by the lessor or the lessor's agent
in connection with the granting, renewal, extension or assignment of a lease
(and a reference in this Act to the payment of a premium extends to giving a
benefit);
"Registrar" means the
Principal Registrar of the Magistrates Court of South Australia;
"renewal" of a retail
shop lease extends to the lessor and the lessee entering into a new retail shop
lease for the retail shop (whether on the same or different terms);
"retail shop" meansC
(a)business
premisesC
(i)at which goods are sold to
the public by retail; or
(ii)at which services are
provided to the public, or to which the public is invited to negotiate for the
supply of services; or
(b)business
premises classified by regulation as premises to which this Act applies,
but does not include business
premises of a class excluded by regulation from the ambit of this definition;
"retail shop lease" or
"lease" means an agreement under which a person grants or agrees to grant
to another person for value a right to occupy a retail shop for carrying on a
businessC
(a)whether
or not the right is a right of exclusive occupation; and
(b)whether
the agreement is express or implied; and
(c)whether
the agreement is oral or in writing, or partly oral and partly in writing;
"retail shopping centre"
means a cluster of premises with the following attributes:
(a)at
least five of the premises are retail shops; and
(b)the
premises are all owned by the same person, or have (or would if leased have) the
same lessor or the same head lessor, or comprise lots within the same community
plan under the Community Titles Act 1996 or units within the same strata
plan under the Strata Titles Act 1988; and
(c)the
premises are located in the one building or in two or more buildings that are
either adjoining or separated only by common areas or other areas owned by the
owner of the premises; and
(d)the
cluster of premises is promoted as, or generally regarded as constituting, a
shopping centre, shopping mall, shopping court or shopping arcade;
"statutory rights of
security of tenure" means the rights conferred on a lessee by Part 4A
Division 2 and, if the retail shop lease relates to premises in a retail
shopping centre, by Part 4A Division 3.
(2) In the
interpretation of this Act, accepted practices and interpretations in the
industry concerning the leasing of retail shops are to be taken into account.
Application of Act
4.
(1) This Act applies to a retail shop lease if the premises to which the lease
applies consist of a retail shop or a retail shop together with an adjacent
dwelling.
(2) However, this Act
does not apply to a retail shop lease ifC
(a)the
rent payable under the lease exceeds $250 000 per annum or, if a greater amount
is prescribed by regulation, that other amount; or
(ab)the
lease is for a term of 1 month or less; or
(b)the
right of occupation arises underC
(i)an agreement for the sale
and purchase of premises; or
(ii)a mortgage; or
(iii)a scheme under which a
group of adjacent premises is owned by a company and the premises comprising the
group are let by the company to persons who jointly have a controlling interest
in the company; or
(c)the
lessee isC
(i)a public company or a
subsidiary of a public company; or
(ii)an ADI; or
(iii)a body corporate
authorised by law to carry on the business of insurance; or
(iv)the Crown or an agency or
instrumentality of the Crown in right of the State, another State or Territory,
or the Commonwealth; or
(v)a municipal or district
council or other authority with powers and functions of local government.
(3) The regulations
may exclude from the application of this Act (either conditionally or
unconditionally) a specified class of retail shop leases.
This Act overrides
leases
5.
(1) This Act operates despite the provisions of a lease.
(2) A provision of a
lease or a collateral agreement is void to the extent that the provision is
inconsistent with this Act.
When the lease is
entered into
6.
For the purposes of this Act, a retail shop lease is taken to have been entered
into whenC
(a)both
parties have executed the lease; or
(b)a
person enters into possession of the retail shop as lessee under the lease; or
(c)a
person begins to pay rent as lessee under the lease or proposed lease (but not
if the payment is an advance payment of rent made to secure the premises),
(whichever happens
first).
PART 2
ADMINISTRATION
Administration of Act
7.
The Commissioner is responsible for the administration of this Act.
Ministerial control
of administration
8.
The Commissioner is, in the administration of this Act, subject to control and
direction by the Minister.
Commissioner's
functions
9.
The Commissioner has the following functions:
(a)investigating
and researching matters affecting the interests of parties to retail shop
leases; and
(b)publishing
reports and information on subjects of interest to the parties to retail shop
leases; and
(c)giving
advice (to an appropriate extent) on the provisions of this Act and other
subjects of interest to the parties to retail shop leases; and
(d)investigating
suspected infringements of this Act and taking appropriate action to enforce
this Act; and
(e)making
reports to the Minister on questions referred to the Commissioner by the
Minister and other questions of importance affecting the administration of this
Act; and
(f)administering
the Fund.
Immunity from
liability
10.
No liability attaches to the Commissioner or any other person acting in the
administration of this Act for an honest act or omission in the exercise or
purported exercise of functions under this Act.
PART 3
BEFORE
THE LEASE IS ENTERED INTO
Copy of lease to be
provided at negotiation stage
11.
A person must not, as lessor or on behalf of the lessor, offer to enter into a
retail shop lease, invite an offer to enter into a retail shop lease or indicate
by written or broadcast advertisement that a retail shop is for lease, unlessC
(a)the
person has a copy of the proposed retail shop lease (in written form, but not
necessarily including particulars of the lessee, the rent or the term of the
lease) available for inspection by a prospective lessee; and
(b)the
person makes a copy of the proposed lease available to any prospective lessee as
soon as the person enters into negotiations with the prospective lessee
concerning the lease.
Maximum penalty:$500.
Lessee to be given
disclosure statement
12.
(1) Before a retail shop lease is entered into or renewed, the lessee must be
given a disclosure statement for the lease.
(2) A disclosure
statement is a written document stating or containingC
(a)the
address of the shop; and
(b)the
lettable area of the shop; and
(c)the
permitted uses of the shop; and
(d)the
term of the lease; and
(e)the
hours during which the lessee will have access to the shop outside trading
hours; and
(f)the
date on which the shop will be available for occupation; and
(g)the
amount of the base rent payable under the lease and the basis on which the base
rent may be changed; and
(h)any
other rent payable under the lease and the basis of its calculation; and
(i)each
category of outgoings the lessee is to be liable to pay or reimburse (in whole
or part), and an estimate of the lessee's annual liability for outgoings of each
category; and
(j)whether
the amount the lessee is required to pay towards outgoing includes a margin of
profit for the lessor and, if so, the percentage profit or the basis on which
the profit is to be calculated; and
(k)the
nature of any other monetary obligations imposed on the lessee under the lease
and, if possible, an estimate of the annual cost of complying with those
obligations; and
(l)whether
any right to renew or extend the term of the lease is given by the lease and, if
so, the nature of the right; and
(m)the
legal consequences of breach of a term of the lease (including the consequences
of early termination of the lease by the lessee); and
(n)a
warning that oral representations made by the lessor or the lessor's agent on
which the lessee has relied should be reduced to writing and signed by or on
behalf of the lessor before the lessee enters into the lease; and
(o)a
warning that the lessee should obtain independent legal and financial advice
before entering into the lease.
(3) If the shop is
situated in a retail shopping centre, the disclosure statement must also stateC
(a)the
address of the retail shopping centre; and
(b)the
number of shops in the retail shopping centre and their total lettable area; and
(c)the
number of parking bays available for the use of customers of the shop and the
number of parking bays available for use by the lessee and the lessee's
employees; and
(d)the
nature of the facilities and services provided by the lessor; and
(e)whether
changes to the retail shopping centre are proposed and, if so, the nature of the
changes; and
(f)the
core trading hours; and
(g)the
current tenant mix and any proposed changes to the current tenant mix; and
(h)whether
the lessor is prepared to give the lessee an assurance that the current tenant
mix will not be altered to the lessee's disadvantage by the introduction of a
competitor; and
(i)whether
there is a tenant association and, if so, the nature of the association, the
voting rights of members, and the contributions payable by members; and
(j)whether
contributions are or may be required towards the costs of advertising and
promoting the shopping centre and, if so, the estimated annual contribution to
be required from the lessee.
(3a) A disclosure
statement must comply with requirements of the regulations about the form in
which it is to be presented.
(4) The tenant should
sign an acknowledgement of receipt of the disclosure statement before signing
the lease or a document that binds the lessee to enter into the lease or to take
the retail shop on lease for a renewed term.
(5) If a disclosure
statement is not given as required by subsection (1), or contains information
that at the time it is given is materially false or misleading, the Magistrates
Court may, on application by the lessee, make one or more of the following
orders as may be appropriate in the circumstances of the caseC
(a)an
order avoiding the lease in whole or part;
(b)an
order varying the lease;
(c)an
order requiring the lessor to repay money paid by the lessee;
(d)an
order requiring the lessor to pay compensation to the lessee;
