New South Wales: Retail Leases Act 1994 (NSW)

Retail Leases Act 1994 No 46 An Act to make provision with respect to the leasing of certain retail shops and the rights and obligations of lessors and lessees of those shops, and for other purposes. Part 1 Preliminary Note— This Act applies to leases of retail shops, with certain limitations. To understand those limitations— * see the definition of retail shop in section 3 for the shops to which this Act applies, * see sections 5 and 6B for the retail shops that are excluded from the operation of this Act, * see sections 6, 6A and 84B for the leases that are excluded from the operation of this Act. 1 Name of Act This Act may be cited as the Retail Leases Act 1994. 2 Commencement This Act commences on a day or days to be appointed by proclamation. 3 Definitions (1) In this Act— authorised deposit-taking institution means an authorised deposit-taking institution within the meaning of the Banking Act 1959 of the Commonwealth. business day means any day except Saturday or Sunday or a day that is a public or bank holiday throughout the State. Department means the Department of Customer Service. exercise of a function includes the performance of a duty. function includes a power, authority or duty. GST has the same meaning as in the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth and includes notional GST of the kind for which payments may be made under section 5 of the Intergovernmental Agreement Implementation (GST) Act 2000 by a person who is a State entity within the meaning of that Act. key-money means any money paid to or at the direction of a lessor or lessor's agent, by way of a premium, non-repayable bond or otherwise, or any benefit that is conferred on or at the direction of a lessor or 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 key-money includes a reference to the conferral of any such benefit). lawyer means a barrister or solicitor. lease preparation expenses means legal or other expenses incurred by the lessor in connection with the preparation or entering into of a retail shop lease including expenses incurred in connection with obtaining the consent of a mortgagee but does not include registration fees under the Real Property Act 1900. lessee means the person who has the right to occupy a retail shop under a retail shop lease, and includes a sublessee and a lessee's or sublessee's heirs, executors, administrators and assigns. lessee's disclosure statement means a statement referred to in section 11A. lessor means the person who grants or proposes to grant the right to occupy a retail shop under a retail shop lease, and includes a sublessor and a lessor's or sublessor's heirs, executors, administrators and assigns. lessor's disclosure statement means a statement referred to in section 11. lettable area of a retail shop does not include— (a) car parking spaces, or (b) storage areas not attached to the retail shop premises where the business of the shop is or is to be carried on. licensed conveyancer means the holder of a licence in force under the Conveyancers Licensing Act 2003. listed business means a business prescribed for the purposes of paragraph (a) of the definition of retail shop (including a business for the time being specified in Schedule 1). outgoings—see section 3A. party means the lessor or the lessee under a retail shop lease. permanent retail market—see section 6B. premises includes a defined area (for example, a stall in a market) in a building or other permanent structure. Registrar means the Registrar of Retail Tenancy Disputes referred to in Part 8. retail shop means premises that— (a) are used, or proposed to be used, wholly or predominantly for the carrying on of one or more of the businesses prescribed for the purposes of this paragraph (whether or not in a retail shopping centre), or (b) are used, or proposed to be used, for the carrying on of any business (whether or not a business prescribed for the purposes of paragraph (a)) in a retail shopping centre. Note 1— Sections 5 and 6B limit the retail shops to which this Act applies. Note 2— Clause 17 of Schedule 3 provides that the businesses specified in Schedule 1 are taken to be prescribed for the purposes of paragraph (a) of this definition until regulations prescribing businesses and repealing Schedule 1 are made. retail shop lease or lease means any agreement under which a person grants to another person for value a right of occupation of premises for the purpose of the use of the premises as a retail shop— (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. Note— Sections 6, 6A and 84B limit the retail shop leases to which this Act applies. retail shopping centre means a cluster of premises (not being the stalls in a market) that has all of the following attributes— (a) at least 5 of the premises are used wholly or predominantly for the carrying on of one or more listed businesses, (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 a single strata plan under the Strata Schemes Development Act 2015, (c) the premises are located in the one building or in 2 or more buildings that are either adjoining or separated only by common areas or other areas owned by the owner of the retail shops, (d) the cluster of premises is promoted as, or generally regarded as constituting, a shopping centre, shopping mall, shopping court or shopping arcade. retail specialty shop means a retail shop referred to in paragraph (a) of the definition of retail shop, other than a department store, a supermarket or premises of a kind prescribed as excluded from this definition by the regulations. Secretary means the Secretary of the Department. specialist retail valuer means— (a) for the purposes of a valuation under this Act relating to a retail specialty shop in a retail shopping centre having both— (i) 20 or more retail specialty shops, and (ii) a total of lettable areas of retail specialty shops that exceeds 1,000 square metres, a valuer having not less than 5 years' experience in valuing retail specialty shops in shopping centres of that kind, or (b) for the purposes of a valuation under this Act relating to any other retail specialty shop or any other retail shop, a valuer having not less than 5 years' experience in valuing retail shops. strata levies means contributions levied under the Strata Schemes Management Act 2015 or any other Act relating to strata schemes. Tribunal means the Civil and Administrative Tribunal. Note— Part 9 contains other provisions that affect the interpretation of this Act. Note— The Interpretation Act 1987 contains definitions and other provisions that affect the interpretation and application of this Act. (2) A reference in this Act to the lessor or the lessee, in the context of a provision that has application to a proposed retail shop lease, includes a reference to the proposed lessor or proposed lessee. 3A Definition of "outgoings" (1) In this Act, outgoings means the following— (a) a lessor's outgoings on account of expenses attributable to the management, operation, maintenance or repair of the retail shop building or land, (b) a lessor's outgoings on account of rates, taxes, levies, premiums or charges payable by the lessor because the lessor is the owner or occupier of the retail shop building or land or is the supplier of a taxable supply (within the meaning of the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth) in respect of the retail shop building or land, (c) fees charged by a lessor for services provided by the lessor in connection with the management, operation, maintenance or repair of the retail shop building or land. (2) In this section, retail shop building or land means the building in which the retail shop is located or (in the case of a retail shop in a retail shopping centre) any building in the retail shopping centre, and includes any areas used in association with any such building. 3B Application of Act to agreements to lease (1) This Act applies to and in respect of an agreement to lease in the same way as it applies to and in respect of a lease. (2) When a lease (the resulting lease) is entered into pursuant to an agreement to lease— (a) a lessor's disclosure statement given for the agreement to lease is deemed to have been given for the resulting lease, and (b) a separate lessor's disclosure statement is not required or permitted to be given for the resulting lease. 4 Notes Notes included in this Act except where occurring in Schedules 2 and 2A are explanatory notes and do not form part of this Act. 5 Certain retail shops excluded from the operation of this Act This Act does not apply to any of the following— (a) shops that have a lettable area of 1,000 square metres or more, (b) shops that are used wholly or predominantly for the carrying on of a business by the lessee on behalf of the lessor, (c) any shop within premises where the principal business carried on on those premises is the operation of a cinema, bowling alley or skating rink and the shop is operated by the person who operates the cinema, bowling alley or skating rink, (d) premises used only for any one or more of the purposes listed in Schedule 1A (Excluded uses), (e) premises of a class or description prescribed by the regulations as exempt from this Act. 6 Leases to which Act does not apply (1) This Act does not apply to any of the following leases of retail shops— (a) (Repealed) (b) leases for a term of 25 years or more (with the term of a lease taken to include any term for which the lease may be extended or renewed at the option of the lessee), (c) leases entered into before the commencement of this section, (d) leases entered into under an option granted or agreement made before the commencement of this section, (e) any other lease of a class or description prescribed by the regulations as exempt from this Act. (2) This Act does not apply to any lease referred to in this section that is assigned to another person after the commencement of this section. Note— Part 9A provides for certain exemptions regarding premises at airports. 6A Application of Act to short-term leases (1) Generally, Act not to apply to short-term leases Subject to subsection (2), this Act does not apply to a lease of a retail shop for a term of less than 6 months without any right for the lessee to extend the lease (whether by means of an option to extend or renew the lease or otherwise). (2) Exception for successive, extended or renewed leases for more than one year If the lessee has been in possession or entitled to be in possession of the retail shop without interruption for more than one year (whether by means of a series of 2 or more leases or by means of an extended or renewed lease or leases, or by any combination of those means), this Act applies to— (a) the lease on and from the day on which the lessee has been in possession or entitled to be in possession of the shop for more than one year, and (b) any succeeding lease or leases of the shop to the lessee, where possession or entitlement to possession is not interrupted. (3) Operation of provisions for disclosure statements Sections 11–12A do not apply to the lease referred to in subsection (2) (a), but apply to any succeeding lease referred to in subsection (2) (b). (4) (Repealed) (5) Operation of other provisions The regulations may provide that, if this Act applies to a lease because of subsection (2), specified provisions of this Act (other than section 11 and Part 2A) do not apply to or in respect of the lease or apply with prescribed modifications. (6) Certain interruptions do not break continuity The regulations may provide that interruptions for a prescribed period or of a prescribed kind are to be disregarded for the purposes of this section. (7) Holding over For the purposes of subsection (1), a provision for holding over by the lessee at the end of the term of the lease does not confer a right on the lessee to extend the lease if it operates at the discretion of each of the lessee and the lessor. (8) Assignment This section has effect in relation to a lease whether or not it is assigned to another person, but if it is assigned the period of possession or entitlement to possession by the assignee is taken to include any period of possession or entitlement to possession by the assignor and any previous assignor. 6B Application of Act to retail shops in markets (1) This Act does not apply to a retail shop that is a stall in a market unless the market is a permanent retail market. (2) A permanent retail market is an assemblage of stalls, styled or described as a market, that are predominantly used for retail businesses and that operate in a building or other permanent structure the sole or dominant use of which (or of the part in which the market operates) is the operation of the market. Note— A stall in a permanent retail market is not a retail shop to which this Act applies unless it satisfies the definition of retail shop in section 3. (3) The regulations may make provision for or with respect to modifying the operation of this Act in its application to a retail shop in a permanent retail market. (4) Regulations under this section may include provision for a mandatory code of conduct for lessors and lessees under leases of retail shops in a permanent retail market (including provision for sanctions for non-compliance with the mandatory code). 7 This Act overrides leases This Act operates despite the provisions of a lease. A provision of a lease is void to the extent that the provision is inconsistent with a provision of this Act. A provision of any agreement or arrangement between the parties to a lease is void to the extent that the provision would be void if it were in the lease. 8 When the lease is entered into (1) For the purposes of this Act, a retail shop lease is considered to have been entered into when a person enters into possession of the retail shop as lessee under the lease or begins to pay rent as lessee under the lease (whichever happens first). (2) However, if both parties execute the lease before the lessee enters into possession under the lease or begins to pay rent under the lease, the lease is considered to have been entered into as soon as both parties have executed the lease. Note— Therefore, if the lessee starts to pay rent as lessee or enters into possession as lessee, the lease is considered to have been entered into even if neither party has executed the lease at that time. Money paid in advance (purportedly as rent) as a deposit to secure premises for a proposed lease does not constitute rent paid as lessee under the lease. Part 2 Entering into a lease 9 Copy of lease and retail tenancy guide to be provided at negotiation stage (1) 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, unless— (a) the person has in his or her possession 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) for the purpose of making the lease available for inspection by a prospective lessee, and (b) the person makes— (i) a copy of the proposed lease, and (ii) if the regulations so provide—a copy of a retail tenancy guide prescribed by or identified in the regulations, available to any prospective lessee as soon as the person enters into negotiations with the prospective lessee concerning the lease. Maximum penalty—50 penalty units. (2) The copy of the retail tenancy guide to be made available to a prospective lessee may be or be a copy of— (a) the officially printed guide, or (b) a version of the guide printed from a website of a government department or authority or from a website identified in the regulations. 10 Right to compensation for pre-lease misrepresentations (1) A party to a retail shop lease is liable to pay another party to the lease (the injured party) reasonable compensation for damage suffered by the injured party that is attributable to the injured party's entering into the lease as a result of a false or misleading statement or representation made by the party, or any person acting under the party's authority, with knowledge that it was false or misleading. (2) The giving of a lessor's disclosure statement to a prospective lessee under a retail shop lease is considered to be the making of a representation by the lessor to the lessee as to the information in the disclosure statement. (2A) The making of a representation by a prospective lessee in a lessee's disclosure statement given to a prospective lessor under a retail shop lease that the prospective lessee has sought independent advice, or as to statements or representations relied on by the prospective lessee in entering the lease, is considered to be the making of a representation by a lessee to the lessor. (3) This section extends to apply to a statement or representation made before the commencement of this section. 11 Lessor's disclosure statement (1) At least 7 days before a retail shop lease is entered into, the lessor must give the lessee a disclosure statement for the lease (the lessor's disclosure statement) that complies with the following requirements— (a) the lessor's disclosure statement is to be in writing and is to be in or to the effect of Parts A and B of the form in Schedule 2 (the prescribed form), (b) the lessor's disclosure statement is to include Part B of the prescribed form for the purposes of Part B being completed by the lessee and provided to the lessor as the lessee's disclosure statement (under section 11A), (c) the lessor's disclosure statement must contain the information and be accompanied by the material that is required to complete or accompany Part A of the prescribed form (but only to the extent that is relevant to the lease concerned), (d) the form of the lessor's disclosure statement is not required to comply strictly with the prescribed form (including its layout) so long as it is substantially to the same effect as the prescribed form. Maximum penalty—50 penalty units. Note— Because the lessor's disclosure statement need only include information relevant to the lease, if the retail shop is not in a retail shopping centre the disclosure statement need not include information that is relevant only to shops in retail shopping centres. (2) If a lessee was not given a disclosure statement as required by subsection (1) or if the disclosure statement that was given to the lessee was incomplete or contained information that at the time it was given was materially false or misleading, the lessee may terminate the lease by notice in writing to the lessor at any time within 6 months after the lease was entered into, unless subsection (3) prevents termination. (2A) If the lessee terminates the lease in accordance with this section, the lessee is entitled to recover compensation from the lessor for costs reasonably incurred by the lessee in connection with the lessee entering into the lease, including compensation for expenditure by the lessee in connection with the fit-out of the retail shop. (3) The lessee cannot terminate the lease under this section on the ground that the disclosure statement is incomplete or contains information that is materially false or misleading if— (a) the lessor has acted honestly and reasonably and ought reasonably to be excused for the failure concerned, and (b) the lessee is in substantially as good a position as the lessee would have been if the failure had not occurred. (4) If a lease is entered into by way of the renewal of a lease, a written statement (a lessor's disclosure update) that updates the provisions of an earlier disclosure statement given to the lessee is, in conjunction with that earlier disclosure statement, considered to be a disclosure statement given for the purposes of this section at the time the lessor's disclosure update is given. (5) The termination of a lease under this section does not affect any right, privilege, obligation or liability acquired, accrued or incurred under the lease in respect of any period before its termination. (6) A lessor's disclosure statement may be amended with the agreement in writing of the lessor and the lessee before or after the lease is entered into and any such amendment has effect from the date specified in the agreement (which can be a date before the agreement is made). Note— The Tribunal also has power to order the rectification of a lessor's disclosure statement. See section 72AB. 11A Lessee's disclosure statement (1) No later than 7 days after receiving the lessor's disclosure statement from the lessor (or within such longer period as may be agreed with the lessor), the lessee must give the lessor a statement in writing (as the lessee's disclosure statement) that is in or to the effect of Part B of the form set out in Schedule 2 and completed as required by that Part. Maximum penalty—50 penalty units. (2) If a lease is entered into by way of the renewal of a lease, a written statement (a lessee's disclosure update) that updates the provisions of an earlier lessee's disclosure statement given to the lessor is, in conjunction with that earlier lessee's disclosure statement, considered to be the lessee's disclosure statement given for the purposes of this section at the time the lessee's disclosure update is given. (3) (Repealed) (4) The regulations may prescribe additional matters to be included in the form of lessee's disclosure statement for the purposes of this section. 12 Lessee not required to pay undisclosed contributions (1) A provision of a retail shop lease that requires the lessee to pay or contribute towards the cost of providing any finishes, fixtures, fittings, equipment or services in or for the shop is void unless the liability to make the payment or contribution was disclosed in a disclosure statement given to the lessee in accordance with this Part. (2) To remove doubt, this section does not apply to outgoings. 12A Lessee not required to pay undisclosed outgoings (1) The lessee under a retail shop lease is not liable to pay any amount to the lessor in respect of any outgoings unless the liability to pay the amount was disclosed in the lessor's disclosure statement for the lease. (2) If the lessor's disclosure statement provided an estimate of the amount of any outgoing and the estimated amount is less than the actual amount, the following provisions apply— (a) if there was no reasonable basis for the estimate when the lessor's disclosure statement was given, the lessee's liability for any payment in respect of the outgoing is to be determined on the basis of the amount estimated (instead of the actual amount) and is to be reduced accordingly, (b) if the lessee's liability to pay an amount (the actual amount) in respect of an outgoing is reduced because there was no reasonable basis for an estimate of the outgoing, any liability of the lessee in respect of any subsequent increase in the outgoing is to be reduced in the same proportion as the actual amount was reduced. (3) This section does not apply to an outgoing in the nature of a tax, rate or levy that is imposed by or under an Act after the lessor's disclosure statement is given and that was not an outgoing of the lessor when the lessor's disclosure statement was given. (4) A lessee is entitled to recover from the lessor any amount paid to the lessor that the lessee was not liable to pay because of this section. (5) Costs associated with the advertising or promotion of a retail shop or retail shopping centre, or of any business carried on there, are not outgoings for the purposes of this section. 13 Costs before fit-out (1) This section applies if a lessee of a retail shop is liable to pay an amount for, or associated with, any works carried out by or on behalf of the lessor (before or after the lease is entered into) to enable the proposed fit-out of the shop by the lessee. (2) The maximum amount of the costs of the works, or a basis or formula with respect to those costs, is to be agreed in writing by the lessor and lessee before the lease is entered into. (3) The lessee is not liable to pay an amount in respect of the works that is more than the agreed maximum amount. (4) (Repealed) 13A Tenancy fit-out statement or guide (1) If a prospective lessor of a retail shop in a retail shopping centre requires a particular standard of construction for fit-outs to be carried out by the lessee, the relevant information relating to the standard must be contained in a tenancy fit-out statement (which may be described as a tenancy fit-out guide)— (a) accompanying the lessor's disclosure statement, or (b) accompanying or included in the lease or any agreement for the lease of the shop. (2) The lessee is not liable to carry out any fit-out of the kind referred to in subsection (1) to the extent that it is not covered by the tenancy fit-out statement. (3) This section does not affect the operation of section 38. 14 Key-money and lease preparation expenses prohibited (1) A person must not, as lessor or on behalf of the lessor, seek or accept the payment of key-money or lease preparation expenses in connection with the granting of a retail shop lease and any provision of a retail shop lease is void to the extent that it requires or has the effect of requiring the payment of key-money or lease preparation expenses in connection with the granting of the lease. (2) If a person contravenes this section— (a) the person is guilty of an offence and liable to a penalty not exceeding 100 penalty units, and (b) (whether or not the person is convicted of an offence under paragraph (a)) the lessee is entitled to recover from the lessor as a debt any payment made or the value of any benefit conferred by the lessee and accepted by or on behalf of the lessor in contravention of this section. (3) This section does not prevent a lessor— (a) (Repealed) (b) from receiving payment of rent in advance, or (c) from securing performance of the lessee's obligations under the lease by requiring the provision of a security bond or other bond or a guarantee from the lessee or any other person (such as a requirement that the directors of a company that is the lessee guarantee performance of the company's obligations under the lease), or (d) from seeking and accepting payment for goodwill of a business from a purchaser of the business, but only to the extent that the goodwill is attributable to the conduct of the business by the lessor, or (e) from seeking and accepting payment for plant, equipment, fixtures or fittings that are sold by the lessor to the lessee in connection with the granting of the lease, or (f) from seeking and accepting payment for the grant of a franchise in connection with the granting of the lease. (4) This section does not prevent a person, as lessor or on behalf of the lessor, from requiring payment by a prospective lessee or the lessee of a reasonable sum in respect of lease preparation expenses incurred in connection with making an amendment to a proposed lease that was requested by or on behalf of the prospective lessee or the lessee, other than— (a) an amendment to insert or vary the particulars of the lessee, the rent or the term, or (b) an amendment to remedy a failure by or on behalf of the lessor to include or omit a term of the proposed lease that was, at the time of the failure to include or omit, agreed between the lessor and the proposed lessee or lessee to be included in or omitted from the proposed lease, or (c) an amendment requested before the lessor is given a lessee's disclosure statement under section 11A. (5) If a prospective lessee or the lessee is liable to pay a reasonable sum referred to in subsection (4), the lessor must provide the prospective lessee or lessee with a copy of any account presented to the lessor in respect of those expenses. The prospective lessee or lessee is not required to make any such payment until the lessor has complied with this requirement. 15 Lessee to be provided with executed copy of lease (1) A retail shop lease is taken to include a provision to the effect that the lessor must provide the lessee with an executed copy of the lease within 3 months after the lease is returned to the lessor or the lessor's lawyer or agent following its execution by the lessee. (2) That 3-month period is to be extended for any delay attributable to the need to obtain any consent from a head lessor or mortgagee (being delay not due to any failure by the lessor to make reasonable efforts to obtain consent). 16 Certain leases must be registered (1) If a retail shop lease is for a term of more than 3 years or if the parties to the lease have agreed that the lease is to be registered, the lessor must lodge the lease for registration in accordance with the Real Property Act 1900 within 3 months after the lease is returned to the lessor or the lessor's lawyer or agent following its execution by the lessee. Maximum penalty—50 penalty units. (2) The 3-month period within which a lease must be lodged for registration is to be extended for any delay attributable to— (a) the need to obtain any consent from a head lessor or mortgagee (being delay not due to any failure by the lessor to make reasonable efforts to obtain consent), or (b) requirements arising under the Real Property Act 1900 that are beyond the control of the lessor. (3) For the purposes of this section, the term of a retail shop lease includes any term for which the lease may be extended or renewed at the option of the lessee. Note— For example, a retail shop lease is for a term of more than 3 years if it is for a term of 1 year with an option to renew for a further term of greater than 2 years. (4) This section does not affect the operation of the Real Property Act 1900. Part 2A Security bonds Division 1 Preliminary 16A Definitions (1) In this Part— approved form means a form approved by the Secretary. authorised officer means— (a) the Secretary, or (b) a person appointed by the Secretary to be an authorised officer— (i) for the purposes of this Part generally, or (ii) for the purposes of a particular provision of this Part in which the expression is used. prescribed proceedings means— (a) proceedings in a court (other than a prosecution) or before the Tribunal in relation to any matter which, under the terms or conditions of a lease, could, but for this Part, have given rise to a claim in relation to a security bond deposited or paid in accordance with those terms or conditions, or (b) mediation of a retail tenancy dispute concerning such a claim. security bond, in relation to a lease or proposed lease, means an amount of money that— (a) was (before or after the lease became, or the proposed lease becomes, binding on the parties) deposited with or paid to— (i) the lessor, or (ii) another person, in accordance with the directions of the lessor or the terms or conditions of the lease or proposed lease, or (iii) another person acting on behalf of the lessor, and (b) was so deposited or paid in such a way that the effect is to secure, otherwise than by payment of rent in advance, the lessor against any failure by a lessee to comply with any terms or conditions (irrespective of whether those terms or conditions are related to payment of rent or not) applying to or in connection with the lease or proposed lease. (2) An amount of money deposited with or paid to a person as referred to in paragraph (a) (ii) or (iii) of the definition of security bond in subsection (1) in respect of a lease is, for the purposes of section 16C, taken to be deposited with or paid to the lessor under that lease. (3) For the purposes of the definition of security bond in subsection (1), where— (a) money is deposited or paid as referred to in that definition in relation to a proposed lease, and (b) a lease between the parties, and of the premises, to which the proposal relates is entered into, the lease entered into is taken to be the lease proposed at the time the money is deposited or paid, whether or not the lease entered into differs from the lease proposed at that time. 16B Guarantees and other forms of security (1) A retail shop lease is taken to include a provision to the effect that the lessor is not entitled to unreasonably refuse to accept a guarantee from an authorised deposit-taking institution in satisfaction of any requirement to provide a security bond or other bond or a third party guarantee for the performance of the lessee's obligations under the lease. (2) Security provided otherwise than in the form of a security bond is not otherwise subject to the requirements of this Part (except section 16BA). 16BA Return of bank guarantees (1) A lessor who receives a bank guarantee for a lease must return the original bank guarantee to the lessee within 2 months (the maximum return period) after the lessee completes performance of the obligations under the lease for which the bank guarantee is provided as security. Maximum penalty—50 penalty units. (2) A lessor is not required to return a bank guarantee if it has expired or been cancelled. (3) The maximum return period does not run for any period during which the matter of the lessor's entitlement to claim or realise the bank guarantee is the subject of proceedings pending in a court or the Tribunal. (4) A lessor who is unable to return an original bank guarantee is able to satisfy the requirement under this section or an order of the Tribunal to return the bank guarantee by providing any consent or release necessary to have the bank guarantee cancelled. (5) A lessor is liable to pay to the lessee compensation for— (a) any loss or damage suffered by the lessee as a result of any failure by the lessor to return a bank guarantee in compliance with this section or an order of the Tribunal, and (b) reasonable costs incurred by the lessee in connection with the cancellation of a bank guarantee because the lessor was unable to return the original bank guarantee in compliance with this section or an order of the Tribunal. (6) In this section, bank guarantee means a guarantee from an authorised deposit-taking institution in satisfaction of any requirement to provide a security bond or other bond or a third party guarantee for the performance of the lessee's obligations under the lease. Division 2 Deposit of security bonds with Secretary 16C Deposit of security bonds with Secretary (1) This section applies where a lessor receives a security bond for a lease or a proposed lease on or after the commencement of this section. (2) The lessor must deposit with the Secretary an amount of money equivalent to the amount of the security bond not later than 20 business days (or, where some other period is prescribed for the purposes of this subsection, that other period) after— (a) the date of receipt of the security bond, or (b) the date on which the lease became, or the proposed lease becomes, binding on the parties, whichever is the later. (3) If a lessor's agent receives on behalf of the lessor a security bond for a lease or proposed lease, subsection (2) extends to require the agent to deposit with the Secretary an amount of money equivalent to the amount of that security bond and so extends as if a reference in that subsection to a lessor were a reference to the agent. (4) The Secretary may, without affecting the obligation imposed on a lessor or lessor's agent under this section, refuse to accept any amount tendered for deposit under subsection (2) that is not accompanied by a notification in or to the effect of the approved form duly completed. (5) If a security bond that is (pursuant to section 82) exempt from the operation of subsection (2) subsequently ceases to be exempt, this section applies to the bond as if it had been received when it ceased to be exempt. (6) The Secretary, by instrument in writing, may, in any particular case or class of cases, extend the period prescribed by or under subsection (2). (7) Subsection (2) has effect despite the terms of a lease, any rule of law or the provisions of any other Act. 16D Deposit of existing security bonds with Secretary (1) If a lessor under a lease or proposed lease to which this Act does not apply received a deposit or payment of money as a security bond and this Act subsequently becomes applicable to the lease (because of the operation of section 6A or for any other cause) this Part then applies to the security bond and the relevant day is the day when this Act becomes applicable to the lease. (2) The lessor, or the lessor's agent, must deposit with the Secretary within 3 months after the relevant day an amount of money equivalent to the current balance of the amount deposited or paid. (3) The current balance is the amount of money deposited or paid, together with any interest or similar payments, and less— (a) any amount that— (i) has been deducted by way of fees or charges by an authorised deposit-taking institution, or (ii) has been refunded or become refundable, or (iii) has become the property of the lessor, or (iv) has become subject to prescribed proceedings, or (v) is payable to the lessee by way of interest earned, before or during the period referred to in subsection (2), or (b) any amount of a kind prescribed by the regulations. (4) The Secretary may, without affecting the obligation imposed on a lessor under subsection (2), refuse to accept any amount tendered for deposit under that subsection that is not accompanied by a notification in or to the effect of the approved form duly completed. (5) If a security bond that is (pursuant to section 82) exempt from the operation of subsection (2), subsequently ceases to be exempt, section 16C applies to the bond as if it had been received when it ceased to be exempt, and this section ceases to apply to the bond. (6) The Minister, by instrument in writing, may, generally or in any particular case or class of cases, extend the period prescribed by subsection (2). (7) Subsection (2) has effect despite the terms of a lease, any rule of law or the provisions of any other Act. 16E Provisions in leases relating to security bonds (1) No one (other than the Secretary) is, in respect of any period after the date that an amount of money equivalent to the amount of a security bond is deposited with the Secretary, entitled to receive interest in respect of the bond. (2) (Repealed) (3) If, but for this Part, a lessor or lessee would have a claim against a security bond under the terms and conditions of a lease for an amount that cannot be recovered under any other provision of those terms and conditions— (a) the lessor may recover from the lessee as a debt an amount equivalent to the amount of the claim that the lessor would have had against that security bond, and (b) the lessee may recover from the lessor as a debt an amount equivalent to the amount of the claim that the lessee would have had against that security bond. Division 3 Payment out of security bonds 16F Interpretation In this Division, a reference to an amount of money, in relation to a lease, is a reference to an amount of money equivalent to the amount of money, or part of the amount of money, as the case may require, held on deposit by the Secretary in respect of that lease. 16G Application for payment (1) An application to the Secretary to pay out an amount of money in respect of a lease may be made— (a) jointly by the lessor and the lessee, or (b) by the lessor alone, or (c) by the lessee alone. (2) An application is to be in or to the effect of the approved form and may be made at any time. (3) An application by the lessor alone and an application by the lessee alone may, at the discretion of the Secretary, be treated as having been made jointly by the lessor and the lessee, if the applications are substantially the same. 16H Payment on application (1) Payment on joint application or to other party If an application under section 16G— (a) is made jointly by a lessor and a lessee under a lease, or (b) is made by a lessor under a lease who, in that application, directs the Secretary to pay out an amount of money to the lessee, or (c) is made by a lessee under a lease who, in that application, directs the Secretary to pay out an amount of money to the lessor, the Secretary must pay out an amount of money as directed in that application. (2) Notice to lessee of application by lessor for payment to lessor If an application under section 16G is made by a lessor alone under a lease who, in that application, directs the Secretary to pay out an amount of money to the lessor, the Secretary must give notice in writing of the receipt of the application to the lessee. (3) Notice to lessor of application by lessee for payment to lessee If an application under section 16G is made by a lessee alone under a lease who, in that application, directs the Secretary to pay out an amount of money to the lessee, the Secretary must give notice in writing of the receipt of the application to the lessor. (4) Payment to applicant lessor If a lessee to whom notice has been given under subsection (2)— (a) does not, within 14 days (or, where some other period is prescribed for the purposes of this subsection, that period) after service on the lessee of the notice or the date of posting of the notice, as the case may be, notify the Secretary in writing that the lessee has commenced prescribed proceedings in relation to an amount of money referred to in the notice, or (b) does so notify the Secretary, but those proceedings are discontinued, the Secretary must pay out that amount to the lessor. (5) Payment to applicant lessee If a lessor to whom notice has been given under subsection (3)— (a) does not, within 14 days (or, where some other period is prescribed for the purposes of this subsection, that period) after service on the lessor of the notice or the date of posting of the notice, as the case may be, notify the Secretary in writing that the lessor has commenced prescribed proceedings in relation to an amount of money referred to in the notice, or (b) does so notify the Secretary, but those proceedings are discontinued, the Secretary must pay out that amount to the lessee. (6) (Repealed) (7) Conflicting applications If conflicting applications are received, the Secretary may disregard the later or latest application received. (8) Notice: exceptions Without limiting subsection (7), the regulations may provide that the Secretary need not give notice under subsection (2) or (3) in such circumstances as may be prescribed. (9) Extension of period in particular cases The Secretary may in any particular case extend the period prescribed by or under subsection (4) or (5). 16I Payment after prescribed proceedings (1) If a lessor or lessee under a lease has, within the period prescribed by or under section 16H (4) or (5), commenced prescribed proceedings in relation to the lease and judgment in the proceedings has been entered in or given by a court or a court or the Tribunal has made an order in those proceedings for the payment of money— (a) the Secretary must— (i) on being served with or obtaining a copy of that judgment or order, and (ii) on being satisfied that the judgment or order has not been satisfied and no steps to enforce the judgment or order have been taken under any other Act, pay out an amount of money held by the Secretary on deposit in respect of the lease, as if the Secretary were the person obliged to pay under the judgment or order, or (b) where the Secretary is satisfied that— (i) the judgment has been entered or given, or the order made, and (ii) that judgment or order has been satisfied (other than as provided in paragraph (a)), the Secretary must pay out that amount of money to the person obliged to pay under the judgment or order. (2) If mediation of a retail tenancy dispute about a security bond has been successful, the Secretary must pay out in conformity with the resulting agreement an amount of money held by the Secretary on deposit in respect of the lease concerned, and for that purpose the Secretary is entitled to require— (a) a copy of a certificate issued under section 16N (3) setting out the terms of the resulting agreement, or (b) a notice in writing, in a form approved by the Secretary, that is signed by the parties and sets out the terms of the resulting agreement. (3) For all purposes, money paid out by the Secretary under subsection (1) is taken to be money paid by the person against whom the judgment was obtained or the order was made. 16J Excess not payable (1) This section applies where, in respect of a lease, the Secretary would, but for this section, be required to pay out an amount of money and that amount of money is in excess of the amount of money held on deposit by the Secretary in respect of the lease. (2) The Secretary— (a) must refuse to pay out the money, and (b) must treat applications for payment out of the money as having been withdrawn, and (c) must inform the applicants accordingly. (3) This section has effect despite any other provision of this Part. 16K Appeal rights (1) The Secretary may, after receiving notice of a judgment or order relating to a security bond, pay out money in respect of the judgment or order no earlier than the expiry of the period within which any right of appeal against the judgment or order must be exercised but must not pay money out if an appeal has been lodged. (2) If an appeal has been lodged, the Secretary must not pay out money in respect of the judgment or order unless satisfied that the appeal has been withdrawn or dismissed. (3) A payment of money by the Secretary in respect of a judgment or order does not prevent an appeal being lodged. 16L Withdrawal of application If prescribed proceedings have not been commenced in relation to an amount of money held by the Secretary within the period prescribed by or under section 16H (4) or (5)— (a) a lessor or a lessee may, at any time before a payment is made in accordance with an application made by the lessor or lessee, withdraw the application, and (b) for the purposes of this section, the application is thereupon taken never to have been made. 16M (Repealed) 16N Miscellaneous provisions (1) If the Secretary is required to pay out an amount of money to a person under this Part, the Secretary may, instead of paying out the money to that person, pay out or apply the money in accordance with that person's directions. (2) For the purposes of this Act, a court or the Tribunal is authorised to issue— (a) a copy of any entry of a judgment or a copy of an order, in each case certified by the proper officer to be a true copy of the entry or order, and (b) where proceedings have been discontinued, a certificate to that effect signed by the proper officer. (3) If a mediation of a retail tenancy dispute about a security bond is successful, the mediator or the Registrar may issue a certificate setting out the resulting agreement. Note— The certificate may be used for the purposes of section 16I. (4) No claim other than a claim provided in this Part lies against the Secretary in respect of security bonds deposited with the Secretary. (5) This Part applies notwithstanding the terms of any agreement, any rule of law or the provisions of any other Act. Division 4 Enforcement provisions 16O Receipts to be given for security bonds (1) A lessor, or the lessor's agent, receiving money deposited or paid as a security bond must, at the time of receiving the money, give or cause to be given to the person making the deposit or payment a receipt for the money. (2) A receipt given under subsection (1) must contain the following particulars— (a) the names of the lessor and lessee, (b) a sufficient identification of the retail shop concerned, (c) the amount of money received, (d) the date the money was received, (e) such other particulars as are prescribed for the purposes of this subsection. (3) A lessor, or the lessor's agent, must keep or cause to be kept, in the manner (if any) and for such term (if any) as are prescribed, a copy of each receipt given under this section. Note— Clause 24 of Schedule 3 provides that, until regulations are made for the purposes of section 16O (3), regulations are taken to include a provision referred to in that clause. 16P (Repealed) 16Q Offences and penalty (1) Any person who contravenes, whether by act or omission, any provision of this Part is guilty of an offence against this Act. (2) Any person who is guilty of an offence under this Part (other than under section 16BA (1) or 16WA (3)) is, on conviction, liable to a penalty not exceeding 20 penalty units. (3) This section does not apply to the Secretary or a person acting for or on behalf of the Secretary. 16R Offences by corporations (1) If a corporation contravenes any provision of this Part or regulations made for the purposes of this Part, each person who is a director of the corporation or who is concerned in the management of the corporation is taken to have contravened the same provision if the person knowingly authorised or permitted the contravention. (2) A person may be proceeded against and convicted under a provision pursuant to subsection (1) whether or not the corporation has been proceeded against or been convicted under that provision. (3) Nothing in this section affects any liability imposed on a corporation for an offence committed by the corporation against this Act or the regulations. (4) This section does not apply to a person in the person's capacity as a director of, or as a person concerned in the management of, a corporation constituted by or under an Act. 16S Time for commencing proceedings for offences Despite anything in any Act, proceedings for an offence against this Part or regulations made for the purposes of this Part may be brought— (a) in the case of an offence in relation to a security bond for a lease or a proposed lease—at any time before the expiration of the period of 3 years that next succeeds— (i) the commission of the offence, or (ii) the termination of the lease, whichever is the later, or (b) in any other case—at any time before the expiration of the period of 3 years that next succeeds the commission of the offence. Division 5 Accounts 16T Accounts The following accounts are to be established in accordance with law— (a) a Retail Leases Security Bonds Trust Account (referred to in this Division as the Trust Account), (b) a Retail Leases Security Bonds Interest Account (referred to in this Division as the Interest Account). 16U Retail Leases Security Bonds Trust Account (1) There is to be paid into the Trust Account all security bonds deposited with the Secretary in accordance with Division 2. (2) There is payable from the Trust Account— (a) security bonds authorised to be paid out under section 16H or 16I, and (b) any other payments authorised by or under this or any other Act to be made from that account. 16V Retail Leases Security Bonds Interest Account (1) There is to be paid into the Interest Account all interest received on investments of money in the Trust Account. (2) There is payable from the Interest Account— (a) the costs of, or the expenses incurred in, the administration of this Act, and (b) any other payments authorised by or under this or any other Act to be made from that account. (3) There is payable from the Interest Account such contributions as are agreed annually by the Minister and the Treasurer for payment to the Consolidated Fund. (4) Contributions referred to in subsection (3) are to be paid in the manner determined by the Treasurer. (5) (Repealed) 16W Agents of Secretary (1) Any money received, invested or paid out by an agent of the Secretary for the purposes of this Part is taken to have been received, invested or paid out, as the case may be, by the Secretary. (2) Any money received by an agent of the Secretary for the purposes of this Part is taken to have been received by the Secretary on the day that it is received by the agent. Division 6 General 16WA Arrangements for online delivery of services (1) The Secretary may establish an online retail bond service comprising online facilities and systems that can be used for any of the following purposes— (a) to deposit a security bond with the Secretary, (b) to make a claim for the payment of a security bond, (c) to make a payment of an amount of a security bond, (d) to give any notice or receipt authorised or required to be given under this Part, (e) to do or facilitate the doing of any other thing authorised or required under this Part. (2) Use of the online retail bond service is subject to any terms and conditions imposed by the Secretary. (3) A lessor, lessor's agent or any other person must not require a lessee or another person to use the online rental bond service. Maximum penalty—50 penalty units. 16X Exemptions (1) For the purposes of, but without affecting the generality of, section 82, a class of security bond may be described by reference to a class of lease or a class of premises in respect of which security bonds are deposited or paid. (2) For the purposes of, but without affecting the generality of, subsection (1), a class of lease may be described by reference to periods of continuous occupancy of premises under leases or by reference to terms or conditions of leases. 16Y Continuous occupation For the purposes of this Part and regulations made in connection with security bonds, where the same lessee continuously occupies the same retail shop under a series of leases from the same lessor, those leases are taken to be one lease. 16Z Annual report The annual report of the Department is to include a report of the security bond scheme under this Part. 16ZA Service of notices and other documents on Secretary (1) Any notice, summons, writ or other proceeding relating to or connected with this Part to be served on the Secretary may be served— (a) by being left at an office of the Department with a person apparently employed there, or (b) in the case of a notice, by posting it addressed to the Secretary at an office of the Department, or (c) in a manner authorised by the Secretary for electronic service. (2) A letter giving a notice in writing to a lessor or lessee by post under Division 3 is taken to be properly addressed if it is addressed to that lessor or lessee at his or her last known address according to the records of the Secretary. (3) This section does not affect the generality of section 81A. 16ZB Recovery of money Any charge, fee or money due to the Secretary in connection with this Part may be recovered as a debt or liquidated demand in a court of competent jurisdiction. 16ZC Regulations (1) The regulations may make provision for or with respect to the scheme provided by this Part, including (without limiting the foregoing) the manner in which money is to be deposited with or paid by the Secretary. (2) Without affecting the generality of section 85, wherever a provision of this Part requires a form to be prescribed or a document to be in writing, the regulations may prescribe— (a) a form to be used for that purpose, and (b) where that form or document is required to be lodged with or served on or sent to any person—the manner of lodgment, service or sending, and (c) particulars or information to be provided by a person completing that form or document. (3) (Repealed) Part 3 Rent and outgoings 17 Payment of rent when lessor's fitout not completed (1) This section applies to a retail shop lease if— (a) the liability of the lessee to pay rent under the lease commences on the lessee entering into possession of the retail shop (whether or not the lessee is required to enter into possession by a specified date), and (b) the lessor has fitout obligations under the lease (that is, the lessor is required to provide any finishes, fixtures, fittings, equipment or services before the lessee enters into possession of the shop). (2) A retail shop lease to which this section applies is taken to provide that— (a) the lessee is not liable to pay rent, or any other amount payable under the lease by the lessee (such as an amount payable in respect of outgoings), in respect of any period before the lessor has substantially complied with the lessor's fitout obligations, and (b) the lessor is not entitled to deny the lessee possession of the retail shop merely because the lessor has not complied with the lessor's fitout obligations under the lease. 18 Restrictions on adjustment of base rent (1) In this section— base rent means rent, or that component of rent, which comprises a specified amount of money (whether or not there is provision for the amount to change). Note— Turnover rent (rent determined by reference to the lessee's turnover) is not base rent because turnover rent is not a specified amount of money (it varies according to the lessee's turnover). (2) A retail shop lease must not provide for a change to base rent less than 12 months after the lease is entered into and must not provide for a change to that rent less than 12 months after any previous change to that rent. This subsection does not apply to a change to base rent by a specified amount or specified percentage. Note— For example, subsection (2) prevents a lease providing for an increase to current market rent more than once in 12 months. It does not prevent a lease providing for the rent to increase by $100 every 6 months. Nor does it prevent a lease providing for the rent to be increased to current market rent after 12 months and then to be increased by 2% every 6 months after that. (3) A provision of a retail shop lease is void to the extent that it— (a) reserves or has the effect of reserving to one party a discretion as to which of 2 or more methods of calculating a change to base rent is to apply on a particular occasion of a change to that rent, or (b) provides for a method of calculating a change to the base rent but reserves or has the effect of reserving to one party a discretion as to whether or not the base rent is to be changed in accordance with that method on a particular occasion, or (c) provides for base rent to change on a particular occasion in accordance with whichever of 2 or more methods of calculating the change would result in the higher or highest rent. (4) If a retail shop lease provides for a change to base rent in a way that has the potential to cause that rent to decrease (such as a provision for the rent to change to current market rent), a provision of the lease is void to the extent that it— (a) prevents or enables the lessor or any other person to prevent base rent decreasing pursuant to the change, or (b) limits or specifies, or allows the limitation or specification of, the amount by which the base rent is to decrease. 19, 19A (Repealed) 20 Turnover rent (1) For the purposes of any provision of a retail shop lease that relates to the determination of rent or a component of rent by reference to turnover, turnover does not include any of the following— (a) the amount of losses incurred in the resale or disposal of merchandise reasonably and properly purchased from customers as trade-ins in the usual course of business, (b) the amount of deposits and instalments received on account of lay-bys, hire purchase or credit sales, and which are refunded to customers, (c) the amount of a refund on a transaction when the proceeds of the transaction have been included as part of turnover, (d) the amount of any service, finance or interest charges payable to any financier in connection with provision of credit to customers (other than commissions on credit or store cards), (e) the price of merchandise exchanged between shops of the lessee if the exchange is made solely for the convenient operation of the business of the lessee and not for the purpose of concluding a sale made at or from the shop to which the lease relates, (f) the price of merchandise returns to shippers, wholesalers or manufacturers, (g) the proceeds of sale of the lessee's fixtures and fittings after their use in the conduct of business at or from the retail shop to which the lease relates, (h) the amount of discounts allowed to customers in the normal course of business, (i) the amount of uncollected credit accounts that are written off, (j) the amount paid or payable by the lessee as GST, (k) the amount of delivery charges, (l) the amount received from the sale of lottery tickets and similar tickets (other than commission on those sales), (m) the amount of revenue from online transaction