New disclosure statement for retail landlords
A new disclosure statement for retail landlords came into effect
on 1 January 2011. Amendments to the Retail Leases Regulations
2003 (Vic) alter the form of disclosure statement. These
amendments aim to bring Victorian retail lease disclosure
statements into alignment with NSW and QLD requirements. Current
leases are not affected but leases entered into after 1 January
2011 must adhere to the new format.
In general, these amendments impose more onerous disclosure
requirements on retail landlords. Landlords and managing agents are
now required to have a greater understanding of their premises, and
tenants are to be given more information about the properties they
will be leasing, affording them the opportunity to make more
informed choices.
For landlords:
- Landlords will need to provide particular details about their
properties and facilities. For example, disclosure requirements
regarding existing fixtures and fittings have become much more
specific: does the property include air conditioning, a hot water
service, separately metered utilities?
- Landlords of retail shopping centres must now also disclose to
tenants the existence of major or anchor tenants in the shopping
centre, and their lease expiry dates.
For tenants:
- Tenants stand to benefit under these changes because they are
now given more information about the leased premises.
- Landlords are required to outline all costs which may be
payable by the tenant (including up-front costs and costs payable
in relation to default or obtaining consents) and identify any
current legal proceedings.
- Landlords must now detail any contributions they will make
towards the cost of a tenant's fitout.
If you are a landlord, managing agent or tenant, you must be
aware of the changes and how they may affect you. Failure to comply
with the new requirements may result in a tenant being entitled to
terminate a lease or withhold rent.
(Authored by: Antony Chung, Cornwall Stodart)