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Amendments to the Retail Leases Act 2003 (Vic) – What does this mean for Landlords?

Amendments to the Retail Leases Act 2003 (Vic) – What does this mean for Landlords?

On 22 September 2020, The Retail Leases Amendment Act 2019 (Vic) (“Amendment Act”) received Royal Assent.
The Amendment Act introduces amendments to the Retail Leases Act 2003 (Vic) and the Building Act 1993 (Vic) (“Building Act”) and, as a result, there have been significant changes to the obligations of landlords of retail premises leases in Victoria.

As a landlord under a retail premises lease In Victoria, you should be aware of the following changes to ensure that you comply with your responsibilities under the new laws as they may have an impact on the way in which your lease is governed.

Recovering costs of essential safety measures from the tenant

A landlord can now, provided it is agreed by the parties under the lease, recover the cost (or part of the cost) of carrying out, in respect of an essential safety measure:

  • repairs or maintenance work; and
  • an installation relating to the fit out of the retail premises.
  • The recovery of such compliance costs by a landlord was previously not permitted pursuant to the VCAT Advisory Opinion (2015) (even when the parties had agreed to such arrangements under the lease), so this is a welcoming change to landlords.
    The Amendment Act also states that a tenant may agree with the landlord to carry out or arrange for repairs or maintenance on essential safety measures on behalf of the landlord. Such arrangements will not, however:

  • affect any obligation of the landlord, as an owner of the building, to comply with any requirements under the Building Act or its related regulations; and
  • limit any obligation of a tenant under a retail lease to contribute to any outgoings for repairs and maintenance work in relation to an essential safety measure.
  • Disclosures by the landlord

    Pursuant to the Amendment Act, a landlord now must:

  • provide a Disclosure Statement (in the prescribed form) and a copy of the proposed lease to a tenant at least 14 days (previously 7 days) prior to the signing of the lease. If these documents are provided to the tenant less than 14 days before the lease is entered, the term of the lease is deemed to commence 14 days after the provision of the documents;
  • notify the tenant if the proposed lease (or any renewal of lease) provided contains any changes to the previous copy of the lease that was given to the tenant. A failure to comply with this obligation may result in a penalty;
  • when providing the tenant with a Disclosure Statement on renewal of a lease:
  • set out any changes to the previous Disclosure Statement given to the tenant in respect of the lease; and
  • include information that is current from a specified date that is within 3 months before the disclosure statement is given; and
  • Where a lease is not in accordance with the agreement for lease, provide a further Disclosure Statement to the tenant.

    Contacts

    Kristy Muhlhan

    Principal

    Kristy Muhlhan

    Principal
    LL.B (Hons) GRAD DIP. L.P., GAICD.
    Since 2014, she has been an owner and Principal of the firm and has mastered a broad range of essential commercial and business skills which go hand in hand with the work she does for...

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