Queensland: Retail Shop Leases Act 1994 (Qld)

Retail Shop Leases Act 1994 An Act about retail shop leases Part 1 Preliminary 1 Short title This Act may be cited as the Retail Shop Leases Act 1994. Part 2 Object of Act and its achievement 3 Object of Act The main object of this Act is to promote efficiency and equity in the conduct of certain retail businesses in Queensland. 4 How main object of Act to be achieved The main object of this Act is to be achieved through— (a) mandatory minimum standards for retail shop leases; and (b) a low cost dispute resolution process for retail tenancy disputes. Part 3 Interpretation Division 1 Standard definitions 5 Definitions The dictionary in the schedule defines particular words used in this Act. Division 2 Key concepts 5A Meaning of retail shop lease (1) A retail shop lease is a lease of a retail shop. (2) However, a retail shop lease does not include a lease of any of the following— (a) a retail shop with a floor area of more than 1,000m2; (b) a retail shop within the South Bank corporation area if the lease is entered into or granted by the South Bank Corporation and is either— (i) a perpetual lease; or (ii) another lease for a term, including renewal options, of at least 100 years; (c) premises used wholly or predominantly for the carrying on of a business by a lessee for a lessor as the lessor's employee or agent; (d) premises in a theme or amusement park; (e) premises at a flea market, including an arts and crafts market; (f) a temporary retail stall at— (i) an agricultural or trade show; or (ii) a carnival, festival or cultural event; (g) premises that, if the premises were not leased, would be premises within a common area of a retail shopping centre, but only if the premises are used for 1 or more of the following— (i) an information, entertainment, community or leisure facility; (ii) telecommunication equipment; (iii) an automatic teller machine; (iv) a vending machine; (v) an advertisement display; (vi) storage; (vii) parking. (3) Also, a retail shop lease does not include a lease of premises located in a retail shopping centre if— (a) the premises are not used wholly or predominantly for carrying on a retail business; and (b) at the time the lease is entered into, either— (i) if the premises are located on a level of a multi-level building—the retail area of the level is 25% or less of the total lettable area of the level; or (ii) if the premises are located in a single level building—the retail area of the building is 25% or less of the total lettable area of the building. Examples for paragraph (b)— 1 A lease of premises for an accounting practice on level 4 of a retail shopping centre is not a retail shop lease if, at the time the lease is entered into, 75% of the total lettable area of level 4 is used wholly for professional or commercial offices. 2 A lease of premises for a medical centre in a stand-alone single level building within the parking area of a retail shopping centre is not a retail shop lease if, at the time the lease is entered into, 80% of the total lettable area of the building is used wholly for providing medical services. (4) The retail area, for a level or building in a retail shopping centre, is the area of the level or building comprising premises used wholly or predominantly for carrying on retail businesses. (5) The total lettable area, for a level or building in a retail shopping centre, is the total area of all the premises of the level or building that are— (a) leased or occupied; or (b) available for lease or occupation. 5B Meaning of retail shop Retail shop means premises that are— (a) situated in a retail shopping centre; or (b) used wholly or predominantly for the carrying on of a retail business. 5C Meaning of retail business Retail business means a business prescribed by regulation as a retail business. 5D Meaning of retail shopping centre A retail shopping centre is a cluster of premises having all of the following attributes— (a) 5 or more of the premises are used wholly or predominantly for carrying on retail businesses; (b) all the premises— (i) are owned by the 1 person; or (ii) have the 1 lessor or head lessor, or, if the premises were leased, would have the 1 lessor or head lessor; or (iii) comprise lots within a single community titles scheme under the Body Corporate and Community Management Act 1997; (c) all the premises are located in— (i) 1 building; or (ii) 2 or more buildings if— (A) the buildings are adjoining; or (B) if the premises are owned by the 1 person—the buildings are separated by common areas or other areas owned by the owner or a road; or (C) if the premises are not owned by the 1 person—the buildings are separated by common areas or a road; (d) the cluster of premises is promoted, or generally regarded, as constituting a shopping centre, shopping mall, shopping court or shopping arcade. 6 Meaning of common areas (1) Common areas of a retail shopping centre are areas in or adjacent to the centre that are used, or intended for use— (a) by the public; or (b) in common by the lessees of premises in the centre in relation to the conduct of businesses in premises in the centre. (2) Common areas include— (a) stairways, escalators and elevators; and (b) malls and walkways; and (c) parking areas; and (d) toilets and rest rooms; and (e) gardens and fountains; and (f) information, entertainment, community and leisure facilities. (3) However, common areas do not include leased areas. 7 Meaning of outgoings (1) A lessor's outgoings for a retail shopping centre or leased building are— (a) the lessor's reasonable expenses directly attributable to the operation, maintenance or repair of the centre or building and areas (associated areas) used in association with the centre or building; and (b) charges, levies, premiums, rates or taxes payable by the lessor because the lessor is the owner or occupier of— (i) the centre or building; or (ii) the land on which the centre or building is situated; and (c) an amount mentioned in section 24A(2). (2) An outgoing mentioned in subsection (1) may be either an apportionable outgoing or a specific outgoing and the sum of the apportionable outgoings and specific outgoings is the lessor's outgoings. (3) However, lessor's outgoings do not include— (a) land tax payable on the land on which the centre or building is situated; and (b) expenditure of a capital nature, including the amortisation of capital costs; and (c) contributions to a depreciation or sinking fund; and (d) insurance premiums for loss of profits; and (e) payment of an excess in relation to a claim on the lessor's insurance policy for the centre or building or associated areas; and (f) lessor's contributions to merchants' associations and centre promotion funds; and (g) payment of interest and charges on amounts borrowed by the lessor. Examples for subsection (3)(b)— 1 Costs and expenses of or incidental to the building or extension of, or major improvement of a structural nature to, the centre or building or associated areas, are expenditure of a capital nature. 2 Replacement costs of major items of plant and equipment in the centre or building are expenditures of a capital nature. 9 Meaning of turnover (1) Turnover of a business carried on in a leased shop is the gross sales of the business for any particular period. (2) However, turnover of a business carried on in a leased shop does not include the following amounts— (a) the net amount of discounts reasonably and properly allowed to customers in the usual course of business; (b) losses incurred in the resale or disposal of goods reasonably and properly purchased from customers as trade-ins in the usual course of business; (c) amounts of uncollected credit accounts written off by the lessee; (d) cash or credit refunds allowed on sales that have previously been included as gross receipts if the goods sold are returned and the sales cancelled; (e) fees for services refunded in whole or part if the fees have previously been included as gross receipts; (f) amounts of instalments refunded to customers for cancelled lay-by transactions; (g) taxes, including GST, imposed on the purchase price or cost of hire of goods or services at the point of sale or hire; (h) delivery charges; (i) the value of goods exchanged between 2 or more of the lessee's shops if the exchange is made solely for the convenient conduct of the lessee's business and not for concluding a sale made at or from the leased shop; (j) the value of goods returned to shippers, wholesalers or manufacturers; (k) amounts received from the sale of the lessee's fixtures and fittings from the leased shop; (l) amounts received from sales made on a commission basis (other than commission on the sales). Examples of sales made on a commission basis— lottery sales, postage stamp sales, public transport ticket sales, telephone card sales Division 3 Notes 9A Notes in text A note in the text of this Act is part of this Act. Part 4 Operation of Act and former Act Division 1 General application of Act and former Act 10 Act binds all persons This Act binds all persons, including the State and, so far as the legislative power of the Parliament permits, the Commonwealth and the other States. 11 Application of Act—when lease entered into A retail shop lease is entered into on the earliest of the following dates— (a) the first date by which the lease is signed by all of the parties to the lease; (b) the date the lessee enters into possession of the retail shop under the lease; (c) the date the lessee first pays rent under the lease, other than as a deposit to secure the premises for the lease. 12 Application of Act—where lease entered into This Act applies to all retail shop leases of premises in Queensland— (a) regardless of where the lease is entered into; and (b) even though the lease purports to be governed by a law other than Queensland law. 13 Application of Act to leases—general This Act applies in relation to all retail shop leases whether entered into, or renewed, before or after 28 October 1994, subject to the following provisions— (a) section 14; (b) section 19(1); (c) section 20; (d) section 20A; (e) section 20B; (f) section 20C; (g) section 21; (h) section 42; (i) section 45(3); (j) section 46AB; (k) part 7. 14 Application of Act—if premises become or cease to be a retail shop after commencement of lease (1) In relation to a lease of premises that become a retail shop only after the commencement of the lease, this Act does not apply to— (a) the lease; or (b) an assignment of the lease; or (c) a renewal of the lease under an option under the lease. Example for subsection (1)(a)— On 1 April 2016 a person enters into a 3-year lease for carrying on a business that is not a retail business from premises that are not in a retail shopping centre. Accordingly, the premises are not a retail shop as defined in the schedule. However, on 1 September 2016, the business is prescribed by regulation as a retail business. Under this subsection, this Act does not apply to the lease even though the premises become a retail shop on this second date. (2) In relation to a lease of premises that cease to be a retail shop after the commencement of the lease, this Act continues to apply to— (a) the lease; or (b) an assignment of the lease; or (c) a renewal of the lease under an option under the lease. Example for subsection (2)(a)— On 1 April 2016 a person enters into a 3-year lease for the conduct of a business that is not a retail business from premises in a retail shopping centre. On 1 September 2016, the cluster of premises in which the leased premises are situated ceases to be a retail shopping centre and the business is still not a retail business. Under this subsection, this Act continues to apply to the lease even though the premises are no longer a retail shop. Division 2 Relationship of Act to retail shop leases 15 Act's provisions implied in leases If, under this Act, a duty is imposed or an entitlement is conferred on a lessor or lessee under a retail shop lease, the duty or entitlement is taken to be included in the lease. 16 Contracting out of Act prohibited A provision of a retail shop lease, or another agreement entered into for a retail shop lease, is void if it purports to exclude the application of a provision of this Act that applies to the lease. 17 Act prevails over inconsistent leases If a provision of this Act is inconsistent with a provision of a retail shop lease, the provision of this Act prevails and the provision of the lease is void to the extent of the inconsistency. Division 3 Particular retail shop leases 18 Definition for div 3 In this division— former Act lease means— (a) a retail shop lease entered into or renewed before 28 October 1994; or (b) a retail shop lease entered into, or renewed, under an option under an agreement entered into before 28 October 1994; or (c) a retail shop lease entered into under an agreement for lease entered into before 28 October 1994; or (d) an assignment of a retail shop lease mentioned in paragraph (a), (b) or (c). 19 Application of Act and former Act to former Act leases (1) The following provisions do not apply in relation to former Act leases— (a) part 4, other than this section; (b) part 5; (c) part 6; (d) section 120. (2) The following provisions of the former Act (to the extent that they applied immediately before 28 October 1994) continue to apply to a former Act lease as if this Act had not been enacted— (a) part 1, other than section 5A; (b) part 2; (c) part 3, other than the following sections— (i) section 10B; (ii) section 10C; (iii) section 15A; (d) section 56; (e) section 57; (f) section 58; (g) schedules 1 and 2. (3) For the purposes of applying a provision of the former Act in relation to a former Act lease, a reference in the provision to— (a) a specialist retail valuer is taken to be a reference to a specialist retail valuer under the Valuers Registration Act 1992; and (b) the registrar is taken to be a reference to the chief executive; and (c) a mediator is taken to be a reference to a mediator under this Act; and (d) a retail shop leases tribunal or tribunal is taken to be a reference to QCAT. 20 Application of Act, s 27 —timing and bases of rent reviews (1) Section 27, as in force immediately before 30 April 1999, continues to apply, as if the 1999 amendment Act had not been enacted, in relation to— (a) a retail shop lease entered into on or after 28 October 1994 but before 30 April 1999; and (b) any extension or renewal of a lease mentioned in paragraph (a). Note— Part 6 does not apply to a former Act lease—see section 19(1)(c). (2) Section 27, as in force immediately before 1 July 2000, continues to apply, as if the 2000 amendment Act had not been enacted, in relation to— (a) a retail shop lease entered into on or after 30 April 1999 but before 1 July 2000; and (b) any extension or renewal of a lease mentioned in paragraph (a). Note— In relation to a retail shop lease entered into before 3 April 2006 and any extension or renewal of the lease, section 27 (as in force on 1 July 2000) continues to apply as if the Retail Shop Leases Amendment Act 2006 had not been enacted—see section 129. (3) In this section— 1999 amendment Act means the Retail Shop Leases Amendment Act 1999. 2000 amendment Act means the Retail Shop Leases Amendment Act 2000. 20A Application of Act to short term retail shop leases (1) Only the following provisions apply in relation to a short term retail shop lease entered into on or after 3 April 2006— (a) part 1; (b) part 2; (c) part 3; (d) part 7; (e) part 12 to the extent it is relevant to parts 1, 2, 3 or 7. (2) In this section— right to extend, a lease, does not include a holding over by the lessee with the lessor's consent. short term retail shop lease means a retail shop lease for which the sum of the following periods is not more than 6 months— (a) the lease's original term; (b) any periods for which the lessee has a right to extend the lease. 20B Application of Act to particular government leases (1) Despite section 10, sections 22A, 22D and 46 do not apply in relation to a government lease. (2) In this section— government lease means a retail shop lease for which the State, Commonwealth, another State or a local government is the lessee or prospective lessee. 20C Application of Act to leases of service stations (1) This Act does not apply to a retail shop lease for the carrying on of the business of a service station if the Competition and Consumer (Industry Codes—Oilcode) Regulation 2006 (Cwlth) applies to the carrying on of the business under a fuel re-selling agreement within the meaning of that regulation. (2) This Act (other than part 6) applies to a retail shop lease for the carrying on of the business of a service station, regardless of when the lease was entered into, if the Competition and Consumer (Industry Codes—Oilcode) Regulation 2006 (Cwlth) does not apply to the carrying on of the business under a fuel re-selling agreement within the meaning of that regulation. Part 5 Preliminary disclosures about leases Division 1 Preliminary 21 Application of pt 5 This part does not apply to a retail shop lease for a periodic tenancy or tenancy at will. Division 2 Disclosure for entering into or renewing lease 21A Application of div 2 This division does not apply to an assignment of a retail shop lease. 21B Lessor's disclosure obligation to prospective lessee (1) At least 7 days before a prospective lessee of a retail shop enters into a retail shop lease (the prescribed disclosure date), the lessor must give the prospective lessee— (a) a draft of the lease; and (b) a disclosure statement. (2) However, for the purposes of complying with subsection (1) in relation to a disclosure statement, it is sufficient if, after the prescribed disclosure date but before the prospective lessee enters into the lease— (a) the lessor gives the prospective lessee the disclosure statement; and (b) the prospective lessee gives the lessor— (i) a waiver notice; and (ii) unless the prospective lessee is a major lessee—a legal advice report for the lease under section 22D which states the lawyer has given the prospective lessee advice about the legal meaning and effect of the waiver. (3) Also, this section does not apply to a renewal of a retail shop lease under an option. (4) In this section— waiver notice, for a prospective retail shop lease, means a written notice signed by the prospective lessee stating that the prospective lessee agrees to waive the lessor's obligation to give a disclosure statement for the lease by the prescribed disclosure date. 21C Sublessor's disclosure obligation to sublessee (1) For the purposes of complying with section 21B in relation to a sublease of a retail shop lease, a prospective sublessor may request a disclosure statement (a head lessor disclosure statement) from the lessor. (2) On request by the prospective sublessor under subsection (1)— (a) the lessor must, within 28 days of receiving the request, give the prospective sublessor a head lessor disclosure statement that is updated to the date it is given; and (b) the prospective sublessor must pay the lessor's reasonable expenses incurred for preparation of the head lessor disclosure statement. (3) In applying section 21B in relation to the sublease— (a) a reference to a prospective lessee is taken to be a reference to a prospective sublessee; and (b) a reference to a lessor is taken to be a reference to a prospective sublessor; and (c) a reference to giving a disclosure statement is taken to be a reference to giving both of the following documents— (i) a head lessor disclosure statement that is updated to a date no more than 2 months before the date the statement is given to the prospective sublessee; (ii) a written statement detailing any matters of which the prospective sublessor is aware, or could reasonably be aware, that affect the information in the head lessor disclosure statement. 21D Franchisor's disclosure obligation to franchisee (1) This section applies if— (a) a person (the franchisor) is the lessee of a retail shop; and (b) the franchisor proposes to grant a licence (the licence) to another person (the franchisee) to occupy and use, for the carrying on of a business, all or part of the retail shop; and Note— If the franchisor proposes to grant a sublease, see section 21C. (c) the business mentioned in paragraph (b) is to be carried on under a name or mark identifying, commonly associated with or controlled by the franchisor or an entity connected with the franchisor. (2) For the purposes of complying with section 21B in relation to the licence, the franchisor may request a disclosure statement (a head lessor disclosure statement) from the lessor. (3) On request by the franchisor under subsection (2)— (a) the lessor must, within 28 days of receiving the request, give the franchisor a head lessor disclosure statement that is updated to the date it is given; and (b) the franchisor must pay the lessor's reasonable expenses incurred for preparation of the head lessor disclosure statement. (4) In applying section 21B in relation to the licence— (a) a reference to a prospective lessee is taken to be a reference to a franchisee; and (b) a reference to a lessor is taken to be a reference to a franchisor; and (c) a reference to giving a disclosure statement is taken to be a reference to giving both of the following documents— (i) a head lessor disclosure statement that is updated to a date no more than 2 months before the date the statement is given to the franchisee; (ii) a written statement detailing any matters of which the franchisor is aware, or could reasonably be aware, that affect the information in the head lessor disclosure statement. 21E Lessor's disclosure obligation to lessee for renewal (1) This section applies in relation to a renewal of a retail shop lease under an option. (2) The lessor must give the lessee a current disclosure statement within 7 days after the day on which the lessor receives the lessee's notice exercising the option to renew (the renewal notice). (3) However, subsection (2) does not apply if, at the time the renewal notice is given to the lessor, the lessee gives the lessor a waiver notice. (4) Within 14 days of receiving the current disclosure statement, the lessee may, whether or not the renewed lease period has commenced, give the lessor a written notice stating that the renewal notice is withdrawn. (5) In this section— current disclosure statement, in relation to a lessor and lessee, means— (a) in any case—a disclosure statement that is updated to the date it is given; or (b) if a disclosure statement was given by the lessor to the lessee during the term of the lease—a written statement that updates the details of the disclosure statement to the date it is given. waiver notice, for a renewal of a retail shop lease, means a written notice signed by the lessee stating that the lessee agrees to waive the lessor's obligation to give a disclosure statement for the lease. 21F Lessor's failure to comply with disclosure obligation (1) A lessee may terminate a retail shop lease by giving written notice to a lessor within 6 months after the lessee enters into the lease if— (a) the lessor does not comply with section 21B or 21E; or (b) a disclosure statement when given to the lessee under section 21B or 21E is a defective statement. (2) For the purposes of this section, a disclosure statement is a defective statement if it— (a) is incomplete in a material particular; or (b) contains information that is false or misleading in a material particular. (3) However, a disclosure statement is not a defective statement merely because— (a) it omits information that is irrelevant to the lease; or (b) its layout does not comply with that of the approved form. (4) The lessee can not terminate the lease under subsection (1) because a disclosure statement is a defective statement if— (a) the lessor acted honestly and reasonably in giving the disclosure statement; and (b) the lessee is in substantially as good a position as the lessee would be if the disclosure statement were not a defective statement. (5) The lessor is liable to pay to the lessee the reasonable compensation decided by way of the dispute resolution process for loss or damage suffered by the lessee because of the noncompliance or defective statement. (6) Termination of the lease under subsection (1) does not affect any right, privilege or liability acquired, accrued or incurred under the lease for any period before the termination. (7) In this section— disclosure statement includes— (a) a statement mentioned in section 21C(3)(c)(ii) or 21D(4)(c)(ii); and (b) a written statement given under section 21E that updates the details of an earlier disclosure statement. 22 Lessor to give lessee the lease document or a certified copy of lease Within 30 days after a retail shop lease is signed by the parties, the lessor must give the lessee the signed lease document or a certified copy of the signed lease. 22A Prospective lessee's disclosure obligation to lessor At least 7 days before a prospective lessee, other than a prospective franchisee, enters into a retail shop lease, the prospective lessee must give the lessor a disclosure statement. Division 3 Disclosure for entering into assignment of lease 22AA Application of div 3 This division applies only to an assignment of a retail shop lease. 22B Assignor's and prospective assignee's disclosure obligations to each other (1) An assignor of a retail shop lease for a leased shop must give a prospective assignee a disclosure statement and a copy of the current lease at least 7 days before the earlier of the following (the prescribed disclosure date)— (a) if the assignment is related to an agreement for sale to the assignee of the assignor's business carried on in the leased shop—the day on which the assignee enters into the agreement; (b) the day the lessor is asked to consent to the assignment. (1A) However, for the purposes of complying with subsection (1) it is sufficient if, after the prescribed disclosure date but before the day mentioned in subsection (1)(a) or (b)— (a) the assignor gives the prospective assignee a disclosure statement and a copy of the current lease; and (b) the prospective assignee gives the assignor a waiver notice. (1B) If the prospective assignee is not a major lessee, a waiver notice given by the prospective assignee is valid and effective even if a lawyer has not given the prospective assignee advice about the legal meaning and effect of the waiver. (2) The prospective assignee must give a disclosure statement to the assignor before the lessor is asked to consent to the assignment. (3) The assignor must give the lessor a copy of the disclosure statement given to the assignee under subsection (1) or (1A) on the day the lessor is asked to consent to the assignment. (4) In this section— waiver notice, for a prospective assignment of a retail shop lease, means a written notice signed by the prospective assignee stating— (a) the prospective assignee agrees to waive the assignor's obligation to give a disclosure statement for the lease and a copy of the current lease by the prescribed disclosure date; and (b) if the prospective assignee is not a major lessee—a lawyer has given the prospective assignee advice about the legal meaning and effect of the waiver. 22C Lessor's and prospective assignee's disclosure obligations to each other (1) At least 7 days before an assignment of a retail shop lease is entered into (the prescribed disclosure date), the lessor must give the prospective assignee a disclosure statement and a copy of the lease. (2) However, for the purposes of complying with subsection (1) in relation to a disclosure statement, it is sufficient if, after the prescribed disclosure date but before the prospective assignee enters into the assignment— (a) the lessor gives the prospective assignee the disclosure statement; and (b) the prospective assignee gives the lessor— (i) a waiver notice; and (ii) unless the prospective assignee is a major lessee—a legal advice report for the lease under section 22D which states the lawyer has given the prospective assignee advice about the legal meaning and effect of the waiver. (3) The prospective assignee must give a disclosure statement to the lessor before the assignment is entered into. (4) In this section— waiver notice, for an assignment of a retail shop lease, means a written notice signed by the prospective assignee stating that the prospective assignee agrees to waive the lessor's obligation to give a disclosure statement for the lease by the prescribed disclosure date. Division 4 General provisions 22D Financial and legal advice reports (1) A prospective lessee, other than a prospective franchisee, of a retail shop who is not a major lessee must, before entering into the lease, give the lessor— (a) a financial advice report; and (b) a legal advice report. (2) A prospective assignee of a retail shop lease who is not a major lessee must, before entering into the assignment, give the lessor— (a) a financial advice report; and (b) a legal advice report. 22E Effect of failure to comply with sections 22A – 22D (1) This section applies if a person (the disclosing person) fails to give another person (the receiving person) a document under sections 22A to 22D and the relevant lease or assignment is entered into. (2) A retail tenancy dispute exists between the persons, and the receiving person, within the relevant period, may apply, as provided under the QCAT Act, to QCAT for an order that the disclosing person give the document to the receiving person. (3) In this section— relevant period means— (a) for section 22A or 22D(1)—within 2 months after the lease is entered into; or (b) for section 22B, 22C or 22D(2)—within 2 months after the assignment is entered into. 23 [Repealed] Part 6 Minimum lease standards Division 1 Preliminary 24 Lessee's obligations to make particular payments (1) A retail shop lease must not contain a provision requiring the lessee to make any payment other than for the following— (a) rent; (b) if specified in the lease, the following— (i) the lessor's outgoings, or the specified part of the lessor's outgoings, for the retail shopping centre or leased building in which the leased shop is situated; (ii) damages for breach of a term of the lease; (iii) an indemnity given by the lessee to the lessor for loss or damage suffered by the lessor as a result of the actions or omissions of the lessee or a person acting for the lessee; (iv) subject to subsection (3), interest on arrears of rent or outgoings; (c) the lessor's reasonable legal or other expenses incurred in responding to a request by the lessee for— (i) a variation of the lease, including, for example, a rent concession; or (ii) the lessor's consent to the lessee entering into a sublease or licence with another person in relation to the leased shop. (2) Subsection (1) applies whether the provision requires payment to be made— (a) to the lessor or someone else; or (b) by the lessee or someone else. Example of subsections (1) and (2)— A provision of a retail shop lease requiring a lessee to pay the lessor's land tax or to reimburse the lessor for land tax (regardless of by whom, or to whom, the payment is to be made) is void under section 17. (3) A retail shop lease may contain a provision requiring the lessee to make a payment for interest on arrears of rent or outgoings only if the interest rate, or the way in which the interest rate is to be calculated, is stated in the lease. (4) Subsection (1) has effect subject to the following sections— • section 24A • section 34 • section 39(2) • section 40 • section 41 • section 48. 24A GST payments (1) Nothing in this Act prevents a lessor from requiring a lessee to pay an amount (the GST amount) that is directly or indirectly attributable to GST payable for a supply made by the lessor to the lessee under the lease. (2) If a lease provides that the GST amount is to be paid by the lessee to the lessor as an outgoings item, the GST amount is a specific outgoing. Division 2 Turnover rent 25 Requirements if rent a percentage of turnover (1) This section applies if, under a retail shop lease, the rent is or may be calculated either in whole or part as a percentage of the turnover of the lessee's business carried on, or to be carried on, in or from the leased shop. (2) The lease must specify the formula to be used to calculate the rent. Division 3 Confidentiality of turnover information 26 Lessor not to disclose turnover information (1) A lessor must not, whether directly or indirectly, disclose to anyone else information obtained by the lessor about the turnover of the lessee's business without the lessee's agreement. Maximum penalty—60 penalty units. (2) However, the lessor may disclose information— (a) in a document giving the aggregate turnover of businesses, or a class of business, in the retail shopping centre in which the leased shop is situated if the disclosure is made in a way that does not disclose information about the turnover of an individual lessee's business; or (b) specifying the turnover of the lessee's business to— (i) a prospective purchaser or mortgagee of the retail shopping centre in which the leased shop is situated; or (ii) a professional adviser to, or properly appointed agent of, a prospective purchaser or mortgagee mentioned in subparagraph (i); or (iii) the lessor's professional advisers; or (iv) a court under a court order; or (v) a mediator under this Act or QCAT; or (vi) a specialist retail valuer under section 30. (3) A person who is given information under subsection (2)(b)(i) or (ii)— (a) may use the information only to enable the prospective purchaser or mortgagee to make a decision whether to purchase the lessor's interest in, or to obtain financial accommodation on the security of, the retail shopping centre; and (b) must not, whether directly or indirectly, disclose the information to anyone else without the lessee's agreement. Maximum penalty—60 penalty units. (4) A person who is given information under subsection (2)(b)(iii)— (a) may use the information only to determine the lessee's rent on the basis of the turnover of the lessee's business carried on in the leased shop or to advise the lessor on the centre's trading performance; and (b) must not, whether directly or indirectly, disclose the information to anyone else without the lessee's agreement. Maximum penalty—60 penalty units. (5) If a person discloses information in contravention of subsection (1), (3) or (4) and the lessee suffers loss or damage because of the disclosure, the lessee is entitled to the reasonable compensation for the loss or damage agreed between the lessor and lessee or, failing agreement, decided by way of the dispute resolution process. (6) An agreement under the lease about the disclosure of turnover information or the amount of compensation is not an agreement for the purposes of subsection (1), (3)(b), (4)(b) or (5). Division 4 Rent review Subdivision 1 Timing and bases of rent reviews 27 Timing and bases of rent reviews (1) If a retail shop lease provides for a review of the rent payable under the lease during the term of the lease, or under an option to renew or extend the lease, the lease must state the timing of the reviews and the basis on which each review is to be made. (2) The rent may not be reviewed more than once in each year of the lease. (3) Subsection (2) does not apply to the first year of the lease. (4) The rent may be reviewed using different bases during the term of the lease, but each review must be made using only 1 basis. (5) The basis for a rent review must be a single basis consisting of 1 of the following— (a) the current market rent of the leased shop; (b) an independently published index of prices, costs or wages; (c) a fixed percentage of the base rent; (d) a fixed actual amount; (e) if the rent is determined as a base rent plus an amount equal to a percentage of the turnover of the lessee's business—the average rental paid over the previous year, or the stated number of previous years, of the lease; (f) another basis prescribed by regulation; (g) a single basis formed by a combination of 2 or more bases mentioned in paragraphs (b) to (f). (6) If the rent is determined as a base rent plus an amount equal to a percentage of the turnover of the lessee's business the review of the base rent must be made in accordance with subsections (4) and (5). (7) If, under a retail shop lease, the rent is to be reviewed during the term of the lease or any renewal or extension of the lease, the rent payable for the rental period after the timing of an invalid review is— (a) for an invalid review mentioned in subsection (11), definition invalid review, paragraph (a)—the same as the rent payable before the timing of the review; or (b) for an invalid review mentioned in subsection (11), definition invalid review, paragraph (b)—the rent worked out on 1 of the bases, chosen by the lessee, on which the review was made; or (c) for an invalid review mentioned in subsection (11), definition invalid review, paragraph (c)—the rent worked out on 1 of the bases, chosen by the lessee, on which the review was to be made under the void provision. (8) Subsections (2) to (7) do not apply if— (a) the lessee is a major lessee; and (b) before the lessee enters into the lease, the lessee gives the lessor a written notice stating the lessee agrees that subsections (2) to (7) do not apply in relation to the lease; and (c) the lease provides for the timing and basis for each review of the lease. (9) To remove any doubt, it is declared that neither of the following is a rent review— (a) an adjustment of the rent merely to enable the lessor to recover GST from the lessee; (b) a rent concession. (10) Nothing in this section prevents a retail shop lease limiting the amount by which the rent payable under the lease may be increased. (11) In this section— invalid review, of rent under the lease, means— (a) a review in a year of the lease, other than the first year, in which the rent is to be reviewed under the lease more than once; or (b) a review made under the lease using more than 1 basis; or (c) a review under a provision of a lease that is void under section 36(1)(d) or (e). year, of the lease, means a period of 12 months starting on— (a) the day the lease is entered into; or (b) an anniversary of the day the lease was entered into; or (c) if, for a particular 12 month period, there is not an anniversary of the day the lease was entered into—the last day of the month corresponding to the month the lease was entered into. Note— Paragraph (c) deals with a lease entered into on the last day of February in a leap year. Subdivision 2 Current market rent 27A Lessee may require early determination of current market rent (1) This section applies if a retail shop lease provides for an option on the lessee's part to renew or extend the lease at the current market rent of the leased shop. (1A) However, this section does not apply if— (a) the lessee is a major lessee; and (b) before the lessee enters into the lease, the lessee gives the lessor a written notice stating that the lessee agrees that this subdivision does not apply in relation to the lease; and (c) the lease provides for the timing and basis for each review of the lease. (2) Unless the current market rent has already been agreed between the lessor and lessee, the lessee may, by written notice given to the lessor in the early determination period, ask for the current market rent to be determined. (3) Sections 28(2) and (3) and 28A to 35 apply to the determination. (4) The current market rent must be determined as at the date the request is made under subsection (2). (5) The rent payable under the renewal or extension is the current market rent determined under this section. (6) Despite any other provision of this Act or the lease, the last day on which the option mentioned in subsection (1) may be exercised is the day that is 21 days after the lessee receives written notice of the current market rent determined under this section. (7) In this section— early determination period means— (a) for a lease of not more than 1 year, the period— (i) starting 3 months before the option expiry day; and (ii) ending 1 month before the option expiry day; or (b) for a lease of more than 1 year, the period— (i) starting 6 months before the option expiry day; and (ii) ending 3 months before the option expiry day. option expiry day means the last day on which the option to renew or extend the lease may, under the lease, be exercised. 28 Rent review on basis of current market rent (1) This section applies if— (a) rent under a retail shop lease is to be reviewed on the basis of the current market rent of the leased shop; and (b) the lessor and lessee can not agree on the current market rent within 1 month after the review date. (2) The current market rent is to be determined by a specialist retail valuer agreed by the lessor and lessee, or failing agreement, appointed by the chief executive. (3) The valuer may carry out the determination only if the valuer is independent of the interests of the lessor and lessee. 28A Parties' submissions to specialist retail valuer (1) This section applies if the current market rent under a retail shop lease is to be determined by a specialist retail valuer under section 28. (2) The valuer must advise the lessor and lessee that the lessor and lessee may give the valuer a submission about the current market rent of the leased shop by a stated date decided by the valuer (the submission date). (3) The submission date must be not less than 14 days after the valuer is agreed to or appointed under section 28. (4) If the lessor or lessee does not give a submission to the valuer by the submission date, the lessor or lessee is taken to have not made a submission for the purposes of this section or section 29(1)(c)(ii). (5) A lessor or lessee who gives a submission to the valuer must also give a copy of it to the other party by the submission date. (6) A lessor or lessee who receives a copy of a submission may give the valuer a written response to it. (7) The response must be given by a stated date decided by the valuer (the response date) that is reasonable in the circumstances. (8) If the lessor or lessee does not give a response to the valuer by the response date, the lessor or lessee is taken to have not made a response for the purposes of this section or section 29(1)(c)(ii). 29 Matters to be considered by specialist retail valuers (1) In making a determination of the current market rent, the specialist retail valuer— (a) must determine the rent— (i) on the basis of the rent that would be reasonably expected to be paid for the retail shop if it were unoccupied and offered for leasing for the same or a substantially similar use for which the shop may be used under the lease; and (ii) on the basis of gross rent less lessor's outgoings payable by the lessee under the lease; and (iii) on an effective rent basis; and (b) must not have regard to the value of the goodwill of the lessee's business or the lessee's fixtures and fittings in the retail shop; and (c) must have regard to— (i) the terms and conditions of the lease; and (ii) submissions and responses from the lessor and lessee about the market rent of the shop; and (iii) the other matters prescribed by regulation. (2) In this section— effective rent basis, for the determination of rent under a retail shop lease, means determining the rent on the basis of taking into account all associated advantages and disadvantages under arrangements made between the lessor and lessee that reflect the net consideration from the lessee to the lessor under the lease and associated arrangements. 30 Valuer may require information from lessor (1) The specialist retail valuer may, by written notice, require the lessor to give the valuer any relevant information about leases in the retail shopping centre in which the shop is situated. (2) If the lessor does not give the information to the valuer within 14 days after the notice is given to the lessor, the valuer, within 7 days after the lessor fails to give the information, must give the lessee written notice of the lessor's failure. (3) If the lessee is given a notice under subsection (2), a retail tenancy dispute exists between the lessor and the lessee. (4) This section has effect despite the provisions of the retail shop lease. 31 Requirements of determination (1) The specialist retail valuer's determination of the current market rent must— (a) be in writing; and (b) identify the location of the leased shop; and (c) state the matters taken into consideration in making the determination; and (d) state detailed reasons for the determination. (2) The determination must also state— (a) whether the current market rent includes GST; and (b) if the rent includes GST, the GST amount. 32 Valuer to give determination to lessor and lessee The specialist retail valuer must give the valuer's determination to the lessor and lessee within 1 month after the latest of the following— (a) the valuer is asked to make the determination; (b) the submission date under section 28A(2); (c) if a submission is made to the valuer under section 28A—the response date under section 28A(7); (d) if the lessor is required to give the valuer information (lease information) under section 30—the lessor gives the lease information to the valuer; (e) if a retail tenancy dispute under section 30 proceeds to mediation or QCAT under part 8—the lessor gives the lease information to the valuer as required by or under a mediation agreement made under the part, or order made by QCAT. 33 Effect of determination The current market rent of the leased shop determined by the specialist retail valuer is the current market rent of the shop and the rent payable under the lease for the rental period under the review. 34 Parties to share cost of determination The lessor and lessee must each pay to the specialist retail valuer one-half of the valuer's fee for determining the current market rent of the retail shop under this subdivision. 35 Confidentiality of lease information (1) A specialist retail valuer who obtains information under section 28A or 30 must not— (a) use the information for any purpose other than to determine the current market rent for the leased shop; and (b) whether directly or indirectly, disclose the information to anyone else without the agreement of the lessor and lessee. Maximum penalty—60 penalty units. (2) However, subsection (1)(b) does not prevent the valuer from disclosing information in a way that does not identify a particular lease when specifying the matters taken into consideration by the valuer in making the determination. (3) If the valuer discloses information in contravention of subsection (1) and the lessor or lessee suffers loss or damage because of the disclosure, the lessor or lessee is entitled to be paid by the valuer the reasonable compensation for the loss or damage agreed between the lessor or lessee and the valuer or, failing agreement, decided by way of the dispute resolution process. Subdivision 3 Other provisions about rent review 36 Certain rent review provisions of leases void (1) A provision of a retail shop lease is void to the extent that it— (a) requires the lessee to appoint someone to determine the current market rent of the leased shop other than in accordance with this Act; or (b) requires the lessee to pay for a determination of current market rent by a specialist retail valuer other than under section 34; or (c) requires the determination of the current market rent of the leased shop to be made other than in accordance with this Act; or (d) reserves, or has the effect of reserving, to a party a discretion to apply 1 of 2 or more methods of calculating the rent of the leased shop on a particular review of the rent; or (e) provides for the rent of the leased shop to change on a particular review of the rent in accordance with whichever of 2 or more methods of calculating the change would result in the higher or highest rent. (2) However, if, under a retail shop lease, a major lessee gives a notice under section 27(8), a provision of the lease that would otherwise be void to a particular extent because of subsection (1)(d) or (e) is not void to that extent because of those provisions. 36A Ratchet rent provision void (1) Subsection (2) applies if a retail shop lease provides a basis for rent review under which the rent may be varied, including by a decrease, but the lease includes a ratchet rent provision. (2) The ratchet rent provision is void. (3) However, if, under a retail shop lease, a major lessee gives a notice under section 27(8), a ratchet rent provision that would otherwise be void is not void. (4) In this section— ratchet rent provision means any provision of a retail shop lease to the extent that it— (a) prevents, or enables the lessor or another person to prevent, the rent decreasing under a rent review; or (b) limits or specifies, or allows the limitation or specification of, the amount by which the rent may decrease under a rent review; or (c) prevents, or allows the avoidance of, the rent review by the lessor or another person for a purpose mentioned in paragraph (a) or (b). Division 5 Lessor's outgoings and other payments 36B Definitions for div 5 In this division— apportionable outgoings, for a retail shop lease, includes maintenance amounts and promotion amounts to the extent the amounts are treated as part of the lessor's outgoings under the lease. audited annual statement see section 38B(1). maintenance amounts see section 40(1). outgoings estimate see section 38A(1). promotion amounts see section 41(1)(a). 37 Lessee's liability to pay amount for outgoings (1) A lessee under a retail shop lease is not liable to pay an amount to the lessor for outgoings unless the lease specifies— (a) the outgoings payable by the lessee; and (b) how the outgoings will be determined and apportioned to the lessee; and (c) how the outgoings may be recovered by the lessor from the lessee. (2) In this section— outgoings, for a retail shop lease, includes promotion amounts and maintenance amounts to the extent the amounts are treated as part of the lessor's outgoings under the lease. 37A [Repealed] 38 Lessee's liability to pay proportion of lessor's apportionable outgoings (1) The proportion of a lessor's apportionable outgoings for a retail shopping centre or leased building payable by a lessee under a retail shop lease who is enjoying or sharing the benefit of the outgoing must not be more than the proportion that the area of the lessee's leased shop bears to the total area of all premises in the centre or building that are owned by the lessor and— (a) leased to or occupied by lessees who enjoy or share the benefit resulting from the outgoing (whether or not they are lessees under retail shop leases); or (b) available for lease to or occupation by lessees who would, if leased or occupied, enjoy or share the benefit resulting from the outgoing (whether or not they would be lessees under retail shop leases). (2) In this section— prescribed purpose means 1 or more of the following purposes— (a) information, entertainment, community or leisure facilities; (b) telecommunication equipment; (c) automatic teller machines; (d) vending machines; (e) advertisement displays; (f) seating, tables and other furniture; (g) trade out areas; (h) storage; (i) parking. total area, of all premises in a retail shopping centre or leased building, does not include areas of premises that, if the areas were not leased or licensed, would be areas within a common area of the centre or building but only if the areas are used for a prescribed purpose. 38A Annual estimate of apportionable outgoings (1) The lessor under a retail shop lease must give the lessee an annual estimate in the approved form of the lessor's apportionable outgoings and the proportion of those outgoings for which the lessee will be liable under the lease (the outgoings estimate). (2) The lessor must give the outgoings estimate— (a) at least 1 month before the start of the period to which the estimate relates; or (b) if the lessee enters into the lease during the period to which the estimate relates or within 1 month before the start of the period—when the lessee enters into the lease. (3) If the shop is in a retail shopping centre, the outgoings estimate must also include a breakdown of the estimated fees to be paid by the lessee towards the administration costs of running the centre and any other fees to be paid to a centre management entity. (4) The outgoings shown in the outgoings estimate must be itemised so that the amount shown for each item is not more than 5% of the total outgoings shown in the estimate. (5) However, the amount shown for an item may be more than 5% of the total outgoings if the item relates to— (a) a charge, levy, rate or tax payable under an Act; or (b) an outgoing that can not be further itemised to comply with subsection (4). (6) If a person becomes the owner of a retail shopping centre, or building containing a retail shop, the first outgoings estimate given by the person may be made for a period of less than 1 year. 38B Audited annual statement of outgoings (1) The lessor under a retail shop lease must give the lessee a statement in the approved form of the lessor's apportionable outgoings (the audited annual statement). (2) The audited annual statement must be given to the lessee within 3 months after the end of the period to which the outgoings relate. (3) The audited annual statement must— (a) be prepared by a registered auditor in accordance with auditing standards generally accepted in the Australian accounting profession; and (b) contain the auditor's opinion on whether the statement presents fairly the lessor's apportionable outgoings for the accounting period to which it relates in accordance with the lessor's financial records and this Act; and (c) compare the annual estimates of the lessor's apportionable outgoings with the amount actually spent by the lessor for the outgoings during the period; and (d) compare the total amount actually spent by the lessor for apportionable outgoings during the period with the total amounts actually paid by lessees to the lessor during the period. (4) The outgoings shown in the audited annual statement must be itemised so that the amount shown for each item is not more than 5% of the total outgoings shown in the statement. (5) However, the amount shown for an item may be more than 5% of the total outgoings if the item relates to— (a) a charge, levy, rate or tax payable under an Act; or (b) an outgoing that can not be further itemised to comply with subsection (4). (6) If the retail shop is in a retail shopping centre, the audited annual statement must also include the total management fees paid by the lessee broken down into fees paid by the lessee towards the administration costs of running the centre and any other fees paid to a centre management entity. (7) The audited annual statement may relate to more than 1 lessee as long as each lessee to which it relates is able to find out from the statement information that is relevant to the lessee. (8) If a person becomes the owner of a retail shopping centre, or building containing a retail shop, the first audited annual statement given by the person may be made for a period of less than 1 year. 38C Lessor does not give outgoings estimate or audited annual statement (1) This section applies if a lessor does not give the lessee an outgoings estimate or an audited annual statement. (2) The lessee may withhold payments in relation to apportionable outgoings until the lessor gives the outgoings estimate or audited annual statement to the lessee. 39 Payment of key money and amount for goodwill prohibited (1) A person must not, as lessor or for the lessor, under or in relation to a retail shop lease, seek or accept the payment of key money or any amount for the goodwill of the lessee's business carried on in or from the leased shop. Maximum penalty—100 penalty units. (2) However, subsection (1) does not prevent a lessor from— (a) recovering from the lessee the lessor's costs reasonably incurred in investigating a proposed assignee of the lessee under a retail shop lease; or (b) recovering from the lessee the lessor's reasonable expenses of and incidental to an assignment of a retail shop lease and any necessary consents to the assignment; or (c) receiving payment of rent in advance if the amount paid is not more than the rent payable for 1 rental period under the lease; or (d) getting a repayable bond from the lessee to secure the lessee's obligations under the lease; or (e) receiving from the purchaser of the lessor's business conducted in a retail shop payment for the goodwill of the business or the plant, equipment, fixtures or fittings in the retail shop; or (f) receiving payment from the lessee for amounts spent by the lessor for fitting out the leased shop; or (g) seeking and accepting payment for the grant of a franchise in relation to the grant of a retail shop lease. (3) If an amount is paid to, or a benefit accepted by, a person in contravention of subsection (1), the person who paid or conferred the benefit may recover the amount or value of the benefit as a debt. Division 6 Other payments for retail shops 40 Sinking fund for major maintenance and repairs (1) This section applies if a lessee under a retail shop lease is required to pay amounts (maintenance amounts) into a sinking fund for major maintenance of, or repairs to— (a) the buildings, plant and equipment of, and areas used in association with, the retail shopping centre in which the leased shop is situated; or (b) the building in which the leased shop is situated and the plant and equipment of, and areas used in association with, the building; or (c) the leased shop and the plant and equipment of, and areas used in association with, the leased shop. (2) The lessor may keep only 1 sinking fund for the purposes mentioned in subsection (1). (3) The lessor must pay maintenance amounts paid by the lessee for the credit of the sinking fund into an interest bearing account kept by the lessor. (4) The lessor must only apply amounts standing to the credit of the sinking fund and interest earned on the fund for a purpose mentioned in subsection (1). (5) The lessor is liable to pay into the sinking fund any deficiency attributable to a failure by the lessor or any predecessor in title of the lessor to comply with subsection (4). (6) The total payments into the sinking fund by all lessees of the retail shops to which the fund relates for any year must not be more than 5% of the total of the lessor's estimated outgoings for the retail shops for the year. (7) The lessor must not seek or accept payments of maintenance amounts from a lessee of a retail shop that would result in the amount standing to