# Document parsed from: NSW_Lease_Act_act-1994-046.pdf

## Page 1


# Retail Leases Act 1994 No 46

# [1994-46]

# New South Wales

# Status Information

Currency of version

Current version for 15 August 2025 to date (accessed 26 November 2025 at 11:25)

Legislation on this site is usually updated within 3 working days after a change to the legislation.

# Provisions in force

The provisions displayed in this version of the legislation have all commenced.

# Notes—

- See also

# Responsible Minister

Minister for Small Business

For full details of Ministerial responsibilities, see the Administrative Arrangements (Minns Ministry—Administration of Acts) Order 2023.

# Authorisation

This version of the legislation is compiled and maintained in a database of legislation by the Parliamentary Counsel's Office and published on the NSW legislation website, and is certified as the form of that legislation that is correct under section 45C of the Interpretation Act 1987.

File last modified 14 October 2025

Certified by the NSW Parliamentary Counsel as being published on www.legislation.nsw.gov.au

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## Page 2

Retail Leases Act 1994 No 46 [NSW]

# Retail Leases Act 1994 No 46

# Contents

- Long title.......................................................................................................................................... 9
- Part 1 Preliminary ....................................................................................................................... 9
- - Note........................................................................................................................................................ 9
- 1 Name of Act ....................................................................................................................................... 9
- 2 Commencement ................................................................................................................................ 9
- 3 Definitions ......................................................................................................................................... 9
- 3A Definition of “outgoings” ................................................................................................................. 12
- 3B Application of Act to agreements to lease....................................................................................... 13
- 4 Notes ............................................................................................................................................... 13
- 5 Certain retail shops excluded from the operation of this Act ........................................................... 13
- 6 Leases to which Act does not apply................................................................................................. 14
- 6A Application of Act to short-term leases............................................................................................ 14
- 6B Application of Act to retail shops in markets ................................................................................... 15
- 7 This Act overrides leases ................................................................................................................. 15
- 8 When the lease is entered into ........................................................................................................ 16

Part 2 Entering into a lease .............................................................................................................. 16

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Retail Leases Act 1994 No 46 [NSW]

# 13 Costs before fit-out

................................................................................................................................................. 20

# 13A Tenancy fit-out statement or guide

................................................................................................................................................. 20

# 14 Key-money and lease preparation expenses prohibited

................................................................................................................................................. 20

# 15 Lessee to be provided with executed copy of lease

................................................................................................................................................. 22

# 16 Certain leases must be registered

................................................................................................................................................. 22

# Part 2A Security bonds

................................................................................................................................................. 22

# Division 1 Preliminary

# 16A Definitions

................................................................................................................................................. 23

# 16B Guarantees and other forms of security

................................................................................................................................................. 24

# 16BA Return of bank guarantees

................................................................................................................................................. 24

# Division 2 Deposit of security bonds with Secretary

# 16C Deposit of security bonds with Secretary

................................................................................................................................................. 25

# 16D Deposit of existing security bonds with Secretary

................................................................................................................................................. 26

# 16E Provisions in leases relating to security bonds

................................................................................................................................................. 27

# Division 3 Payment out of security bonds

# 16F Interpretation

................................................................................................................................................. 27

# 16G Application for payment

................................................................................................................................................. 27

# 16H Payment on application

................................................................................................................................................. 27

# 16I Payment after prescribed proceedings

................................................................................................................................................. 29

# 16J Excess not payable

................................................................................................................................................. 30

# 16K Appeal rights

................................................................................................................................................. 30

# 16L Withdrawal of application

................................................................................................................................................. 30

# 16M (Repealed)

................................................................................................................................................. 30

# 16N Miscellaneous provisions

................................................................................................................................................. 30

# Division 4 Enforcement provisions

# 16O Receipts to be given for security bonds

................................................................................................................................................. 31

# 16P (Repealed)

................................................................................................................................................. 31

# 16Q Offences and penalty

................................................................................................................................................. 32

# 16R Offences by corporations

................................................................................................................................................. 32

# 16S Time for commencing proceedings for offences

................................................................................................................................................. 32

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## Page 4

Retail Leases Act 1994 No 46 [NSW]

# Division 5 Accounts

16T Accounts

16U Retail Leases Security Bonds Trust Account

16V Retail Leases Security Bonds Interest Account

16W Agents of Secretary

# Division 6 General

16WA Arrangements for online delivery of services

16X Exemptions

16Y Continuous occupation

16Z Annual report

16ZA Service of notices and other documents on Secretary

16ZB Recovery of money

16ZC Regulations

# Part 3 Rent and outgoings

17 Payment of rent when lessor’s fitout not completed

18 Restrictions on adjustment of base rent

19, 19A (Repealed)

20 Turnover rent

21 Special rent—cost of fitout

21A (Repealed)

22 Recovery of outgoings from lessee

22A Recovery by lessor of GST

23 Capital costs not recoverable from lessee

24 Depreciation not recoverable from lessee

24A Interest and charges incurred by lessor on borrowings not recoverable from lessee

24B Rent and other costs associated with other land not recoverable from lessee

25 Sinking fund for major repairs and maintenance

25A Limits on sinking funds

25B Sinking fund repayment

26 Limit on recovery of land tax

27 Outgoings estimates

28 Outgoings statements

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Retail Leases Act 1994 No 46 [NSW]

# 28A Non-provision of outgoings estimate or statement

.......................................................................44

# 29 Adjustment of contributions to outgoings based on actual expenditure properly and reasonably incurred

............................................................................................................................................................. 44

# 30 Non-specific outgoings contribution limited by ratio of lettable area

............................................................................................................................................................. 45

# 31 Determination of current market rent

............................................................................................................................................................. 45

# 31A Information supplied to valuer

............................................................................................................................................................. 47

# 32 Opportunity for lessee to have current market rent determined early

............................................................................................................................................................. 48

# 32A Review of current market rent determinations

............................................................................................................................................................. 49

# 32B Appointment of specialist retail valuers

............................................................................................................................................................. 50

# Part 4 Alterations and other interference with the shop

# 33 Lessee to be given notice of alterations and refurbishment

............................................................................................................................................................. 51

# 34 Lessee to be compensated for disturbance

............................................................................................................................................................. 51

# 34A Relocation

............................................................................................................................................................. 52

# 35 Demolition

............................................................................................................................................................. 54

# 36 Damaged premises

............................................................................................................................................................. 55

# 37 Employment restriction

............................................................................................................................................................. 55

# 38 Refurbishment and refitting

............................................................................................................................................................. 56

# Part 5 Assignment and termination

# 39 Grounds on which consent to assignment can be withheld

............................................................................................................................................................. 56

# 40 Key-money on assignment prohibited

............................................................................................................................................................. 56

# 41 Procedure for obtaining consent to assignment

............................................................................................................................................................. 57

# 41A Protection of assignor of lease for ongoing business

............................................................................................................................................................. 58

# 42 Lessor may reserve right to refuse sublease, mortgage

............................................................................................................................................................. 59

# 43 Application of Conveyancing Act 1919

............................................................................................................................................................. 59

# 44 Notice to lessee of lessor’s intentions at end of lease

............................................................................................................................................................. 59

# 44A Negotiations for renewal or extension of lease

............................................................................................................................................................. 60

# 45 Key-money and lease preparation expenses for renewal or extension prohibited

............................................................................................................................................................. 61

# Part 6 Miscellaneous

# 46 Trading hours

............................................................................................................................................................. 62

# 47 Information about turnover from online transactions

............................................................................................................................................................. 62

# 48 Independent legal advice

............................................................................................................................................................. 62

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Retail Leases Act 1994 No 46 [NSW]

# Part 7 Additional requirements for retail shopping centres

49 Part applies only to retail shopping centres

50 Confidentiality of turnover information

51 Statistical information to be made available to lessee

52 Advertising and promotion requirements

53 Marketing plan for advertising and promotion

54 Six-monthly advertising and promotion expenditure statement to be made available to lessees

55 Annual advertising and promotion expenditure statement to be given to lessees

55A Non-provision of marketing plan or advertising and promotion statement

56 Unexpended advertising and promotion contributions to be carried forward

57 (Repealed)

58 Termination for inadequate sales prohibited

59 Geographical restrictions

60 Tenants association

61 Trading hours

62 Special provision for strata shopping centres

# Part 7A Unconscionable conduct and misleading or deceptive conduct

# Division 1 Unconscionable conduct

62A Application of Division

62B Unconscionable conduct in retail shop lease transactions

# Division 2 Misleading or deceptive conduct

62C Interpretation and application of Division

62D Misleading or deceptive conduct in connection with retail leases

62E Right to compensation

# Part 8 Dispute resolution

# Division 1 Preliminary

63 Interpretation

# Division 2 Mediation

64 The Registrar

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Retail Leases Act 1994 No 46 [NSW]

# 65 Functions of Registrar

...................................................................................................................................................... 73

# 66 Mediation of disputes and other matters

...................................................................................................................................................... 74

# 67 The nature of mediation

...................................................................................................................................................... 74

# 68 Disputes and other matters must be submitted to mediation before proceedings can be taken

...................................................................................................................................................... 75

# 69 Statements made during mediation not admissible

...................................................................................................................................................... 75

# Division 3 Determination of claims by Civil and Administrative Tribunal

...................................................................................................................................................... 75

# 70 Definitions

...................................................................................................................................................... 75

# 71 Lodging of retail tenancy claims with Tribunal

...................................................................................................................................................... 76

# 71A Lodging of unconscionable conduct claims with Tribunal

...................................................................................................................................................... 76

# 71B Lodging of claims after 3 years

...................................................................................................................................................... 77

# 72 Powers of Tribunal relating to retail tenancy claims

...................................................................................................................................................... 77

# 72AA Powers of Tribunal relating to unconscionable conduct claims

...................................................................................................................................................... 78

# 72AB Power of Tribunal to order rectification of lease or disclosure statement

...................................................................................................................................................... 79

# 72A Power of Tribunal to award interest

...................................................................................................................................................... 79

# 73 Monetary limit on Tribunal’s jurisdiction

...................................................................................................................................................... 80

# 74 (Repealed)

...................................................................................................................................................... 80

# 75 Removal of court proceedings to the Tribunal

...................................................................................................................................................... 81

# 76 Jurisdictional overlap

...................................................................................................................................................... 81

# 76A Removal of proceedings to Supreme Court

...................................................................................................................................................... 82

# 77–77C (Repealed)

...................................................................................................................................................... 83

# Part 9 Ancillary interpretation provisions

...................................................................................................................................................... 83

# 78 Interpretation based on industry practice

...................................................................................................................................................... 83

# 78A Meaning of “the Act” in leases

...................................................................................................................................................... 83

# 79 Leases partly for retail shops and partly for other premises

...................................................................................................................................................... 83

# 80 Meaning of “renewal” of lease

...................................................................................................................................................... 83

# Part 9A Premises at airports

...................................................................................................................................................... 83

# 80A Definitions

...................................................................................................................................................... 83

# 80BA Application

...................................................................................................................................................... 84

# 80B Non-retail premises exempted

...................................................................................................................................................... 84

# 80C Leases in master concessions over 1,000 square metres exempted

...................................................................................................................................................... 85

# 80D Exemption from section 34

...................................................................................................................................................... 85

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Retail Leases Act 1994 No 46 [NSW]

# 80E Exemption from section 39

............................................................................................................ 85

# 80F Exemption from section 50

............................................................................................................ 85

# Part 10 General

.......................................................................................................................... 86

# 81 Extension of term—effect on Real Property Act 1900

.......................................................................................................................... 86

# 81A Service of documents and notices

.......................................................................................................................... 86

# 82 Exemptions from Act

....................................................................................................................... 87

# 82A Certain transport and rail authorities

............................................................................................................................ 87

# 82B Delegation by Secretary

....................................................................................................................... 87

# 83 Act binds Crown

............................................................................................................................... 87

# 83A Penalty notices

.............................................................................................................................. 88

# 84 Proceedings for offences

................................................................................................................. 88

# 84A Savings and transitional provisions

............................................................................................................................... 88

# 84B Transitional provisions regarding alteration of list of businesses: existing leases

......................................................................................................................... 88

# 84C Transitional provisions regarding additions to list of businesses: shopping centres

...................................................................................................................... 89

# 85 Regulations

...................................................................................................................................... 90

# 86 Review of Act

................................................................................................................................... 90

# Part 11 Response to COVID-19 pandemic

...................................................................90

# 87 Regulation-making power

................................................................................................................ 90

# 88 Savings of protections granted during COVID-19 pandemic

.................................................................................................................... 91

# 89 Savings and transitional regulations

........................................................................................................................ 92

# Schedule 1 (Repealed)

................................................................................................................. 92

# Schedule 1A Excluded uses

................................................................................................. 92

# Schedule 2 Lessor and lessee disclosure statements

.................................................. 93

# Schedule 2A Assignor’s disclosure statement

....................................................... 105

# Schedule 3 Savings and transitional provisions

................................................... 106

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## Page 9


Retail Leases Act 1994 No 46 [NSW]

# Retail Leases Act 1994 No 46

# New South Wales

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.
- 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.

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Retail Leases Act 1994 No 46 [NSW]

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.

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## Page 11

Retail Leases Act 1994 No 46 [NSW]

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.

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Retail Leases Act 1994 No 46 [NSW]

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

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## Page 13

Retail Leases Act 1994 No 46 [NSW]

# 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.

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## Page 14

Retail Leases Act 1994 No 46 [NSW]

# 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)

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## Page 15

Retail Leases Act 1994 No 46 [NSW]

(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.

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# 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.

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# 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

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(1) If a 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

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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.

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(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

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(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

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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

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# 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—

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—

(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.

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(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

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(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.

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# 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.

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# 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

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# 16H Payment of amounts

(1) If an application under section 16G is made by—

- (a) 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
- (b) 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.

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(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—

(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.

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# 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.

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(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)

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# 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

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# 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.

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# 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

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to be served on the Secretary may be served—

1. by being left at an office of the Department with a person apparently employed there, or
2. in the case of a notice, by posting it addressed to the Secretary at an office of the Department, or
3. 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—
3. 1. a form to be used for that purpose, and
2. 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
3. particulars or information to be provided by a person completing that form or document.

(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—

1. 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

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(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

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(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,

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(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 transactions, other than online transactions where the goods or services concerned are delivered or provided from or at the retail shop (or the retail shopping centre of which the shop forms part) or where the transaction takes place while the customer is at the retail shop (whether or not the goods or services concerned are delivered from or at the retail shop).

(2) The lease is taken to provide for any underpayment or overpayment of rent (resulting from actual turnover differing from projected or presumed turnover) to be adjusted within 1 month after the lessee requests the lessor in writing for such an adjustment and provides the lessor with such information as the lessor may reasonably require to make the adjustment.

(3) The lessee may make a request for such an adjustment only once in the first 12 months of the lease term and thereafter only at intervals of not less than 12 months following the first request for an adjustment under the lease. This subsection does not prevent the lease providing for, or the parties otherwise agreeing to, more frequent adjustments than are provided for by this section.

(4) For the purposes of this section, the concept of “turnover” includes gross takings, gross receipts, gross income and similar concepts.

# 21 Special rent—cost of fitout

Nothing in this Act prevents a retail shop lease from providing for the payment of a special rent (in addition to any other rent) to cover the cost of fitout, fixtures, fittings and equipment installed or provided by the lessor at the lessor’s expense.

# 21A (Repealed)

# 22 Recovery of outgoings from lessee

(1) The lessee under a retail shop lease is not liable to pay any amount to the lessor in respect of any outgoings except in accordance with provisions of the lease that specify—

- (a) the outgoings that are to be regarded as recoverable, and
- (b) how the amount of those outgoings will be determined and how they will be apportioned to the lessee, and
- (c) how those outgoings or any part of them may be recovered by the lessor from the lessee.

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Note.

A lessee has no liability in respect of outgoings unless the liability was disclosed in the lessor’s disclosure statement. See section 12A.

(2) In this Part, the expression outgoings to which the lessee contributes refers to any outgoings in respect of which the lessee is liable under the lease to make any payment to the lessor.

(3) 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.

# 22A Recovery by lessor of GST

(1) An agreement that was made between a lessor and a lessee before the date of commencement of this section (whether or not the agreement is contained in a lease), to the extent to which it provides for the payment by or recovery from the lessee of the amount of any GST payable in respect of the lease, is valid and is taken at all relevant times to have been validly made.

(2) This section has effect despite any other provision of this Act.

# 23 Capital costs not recoverable from lessee

A provision in a retail shop lease is void to the extent that it requires the lessee to pay any amount in respect of the capital costs of the building in which the retail shop is located or (in the case of a retail shop in a retail shopping centre) of any building in the retail shopping centre or any areas used in association with any such building.

# 24 Depreciation not recoverable from lessee

A provision in a retail shop lease is void to the extent that it requires the lessee to pay any amount in respect of depreciation.

# 24A Interest and charges incurred by lessor on borrowings not recoverable from lessee

A provision in a retail shop lease is void to the extent that it requires the lessee to pay an amount in respect of interest or other charges incurred by the lessor in respect of amounts borrowed by the lessor.

# 24B Rent and other costs associated with other land not recoverable from lessee

(1) A provision in a retail shop lease is void to the extent that it requires the lessee to pay an amount in respect of rent and other costs associated with unrelated land.

(2) In this section—

unrelated land means land other than—

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(a) land on which the building or retail shopping centre of which the retail shop forms part is situated, or

(b) land of the lessor used by or for the benefit of the lessees conducting business in that building or retail shopping centre or in connection with trading in that building or retail shopping centre.

# 25 Sinking fund for major repairs and maintenance

If a retail shop lease provides for the establishment of a sinking fund to fund provision for major items of repair or maintenance, the lease is taken to include provision to the following effect—

- (a) Any amount paid by the lessee in respect of the lessor’s outgoings on account of those major items of repair or maintenance is to be paid into the sinking fund.
- (b) So much of the balance standing to the credit of the sinking fund as remains unexpended from time to time for any purpose for which the sinking fund was established is to be held by the lessor in an account bearing interest.
- (c) Amounts paid by the lessee for credit of the sinking fund, and the net interest earned by the lessor on the sinking fund, must not be applied by the lessor for any purpose other than payment of any outgoings for which the sinking fund was established.
- (d) The lessor is liable to contribute to the sinking fund any deficiency attributable to a failure by the lessor or any predecessor in title of the lessor to comply with paragraph (c).

Note.

The effect of paragraph (d) will be that a purchaser of the shop from the lessor will have to ensure that the sinking fund has been properly administered and maintained by the previous lessor because the incoming lessor will be liable for any shortfall.

- (e) The major items of repair or maintenance for which contribution to the sinking fund may be required by the lessee are limited to repair or maintenance of a building, or plant and equipment of a building, in which the retail shop is situated or, in the case of a retail shopping centre, to the buildings, plant and equipment and areas used in association with the retail shopping centre in which the retail shop is situated.
- (f) The lessee is not liable to contribute an amount to the sinking fund that is greater than the maximum amount permitted under the Act.
- (g) The lessor must keep full and accurate accounts of all money received or held by the lessor in respect of the sinking fund.
- (h) The lessor must give the lessee, not later than 3 months after the end of each accounting period of the lessor during the term of the lease, a sinking fund statement containing details of expenditure during the period from the fund on items for which

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the lessee is required to contribute. The lessor must also provide with the statement a report on the statement prepared by a registered company auditor (within the meaning of the Corporations Act 2001 of the Commonwealth).

# 25A Limits on sinking funds

1. This section applies to the lessor under a retail shop lease that provides for the establishment of a sinking fund to fund provision for major items of repair or maintenance.
2. The lessor must not establish more than one sinking fund at any one time in respect of retail shop leases for retail shops situated in the same building or retail shopping centre.
3. The lessor must not require or accept contributions to the sinking fund in respect of any retail shop situated in a retail shopping centre that total an amount that exceeds 5% of the total of the lessor’s estimated outgoings for the year concerned in respect of the retail shopping centre.
4. The lessor must not require or accept contributions by a lessee to the sinking fund if the amount outstanding to the credit of the sinking fund is more than $250,000.

Maximum penalty—50 penalty units.

# 25B Sinking fund repayment

1. This section applies to the lessor under a retail shop lease of a retail shop that provides for the establishment of a sinking fund to fund provision for major items of repair or maintenance.
2. If the building or retail shopping centre in which the retail shop is located is destroyed or demolished or, in the case of a retail shopping centre, the retail shopping centre ceases to operate, the lessor must repay to each lessee liable to contribute to the sinking fund the amount payable to the lessee.
3. The amount payable to the lessee is that proportion of the total amount outstanding to the credit of the sinking fund that is equal to the proportion that the lettable area of the lessee’s retail shop bears to the total lettable area of all the shops in respect of which contributions are required to be made to the fund.
4. In this section—

lessor and lessee mean the persons who were the lessor and lessee, respectively,

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under a retail shop lease immediately before the destruction or demolition of the building, or immediately before the retail shopping centre ceased to operate.

# 26 Limit on recovery of land tax

(1) A provision of a retail shop lease which requires the lessee to pay money to the lessor in respect of outgoings attributable to land tax payable by the lessor is taken to include provision that the liability of the lessee is not to exceed the amount of that liability had the amount of land tax payable by the lessor been assessed on the basis that—

- (a) the land concerned was the only land owned by the lessor, and
- (b) the land concerned was not subject to a special trust (within the meaning of the Land Tax Management Act 1956), and
- (c) the lessor was not a company classified under section 29 of that Act as a non-concessional company.

(2) The land concerned is the land on which the building or retail shopping centre of which the retail shop forms part is situated, together with all the other land of the lessor used or available for use by or for the benefit of the lessees conducting business in that building or retail shopping centre or in connection with trading in that building or retail shopping centre. In the case of a shop comprising a lot in a strata scheme under the Strata Schemes Development Act 2015, the land concerned is the lot.

# 27 Outgoings estimates

A retail shop lease is taken to include provision to the following effect—

- (a) the lessor must give the lessee a written estimate of the outgoings to which the lessee contributes under the lease, itemising those outgoings under the item descriptions used in the list of outgoings in the form of lessor’s disclosure statement that is the prescribed form for the purposes of section 11,
- (b) the estimate of outgoings must be given to the lessee in respect of each accounting period of the lessor during the term of the lease and must be given before the lease is entered into and thereafter during the term of the lease at least 1 month before the commencement of the accounting period concerned,
- (c) if the shop is in a retail shopping centre, the estimate of outgoings is to include—

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Retail Leases Act 1994 No 46 [NSW]

# 28 Outgoings statements

(1) A retail shop lease is taken to include provision to the following effect—

- (a) The lessor must give the lessee a written statement (an outgoings statement) that details all expenditure by the lessor in each accounting period of the lessor during the term of the lease on account of outgoings to which the lessee is required to contribute.
- (b) If the shop is in a retail shopping centre, the outgoings statement must include a statement of the current gross lettable area of the shopping centre and details of any material change in that gross lettable area during the period to which the outgoings statement relates.
- (b1) If the shop is in a retail shopping centre, the outgoings statement is to include—
- - (i) a statement of total management fees paid in respect of the centre, broken down into the fees paid towards the administration costs of running the centre and other fees paid to the management company, and
- (ii) a statement of total cleaning costs paid by the lessor, broken down into the costs of consumables and other costs, and
- (iii) any other particulars prescribed by the regulations.

(c) The outgoings statement is to be prepared in accordance with relevant principles and disclosure requirements of applicable accounting standards made by the Australian Accounting Standards Board, as in force from time to time.
- (d) The outgoings statement is to be given to the lessee within 3 months after the end of the accounting period to which it relates.
- (e) The outgoings statement is to be accompanied by a report (an auditor’s report) on the statement prepared by a registered company auditor (within the meaning of the Corporations Act 2001 of the Commonwealth).
- (f) The auditor’s report is to include a statement by the auditor as to whether or not the outgoings statement correctly states the expenditure by the lessor during the accounting period concerned in respect of outgoings to which the lessee is required to contribute, and as to whether or not the total amount of estimated outgoings for that period (as shown in the estimate of outgoings given to the lessee) exceeded the total actual expenditure by the lessor in respect of those outgoings during that period.

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Retail Leases Act 1994 No 46 [NSW]

(g) The outgoings statement may be a composite statement (that is, it may relate to more than one lessee) so long as each lessee to which it relates is able to ascertain from the statement the information required by paragraph (a) that is relevant to that lessee.

(h) The outgoings statement need not be accompanied by an auditor’s report if the statement does not relate to any outgoings other than land tax, water, sewerage and drainage rates and charges, local council rates and charges, insurance and strata levies, and it is accompanied by copies of assessments, invoices, receipts or other proof of payment in respect of all expenditure by the lessor as referred to in paragraph (a).

(2) An auditor preparing a report under subsection (1) (e) or the lessor must ensure that the lessee is given a reasonable opportunity to make a written submission to the auditor on the accuracy of the lessor’s proposed outgoings statement. The auditor need not contact the lessee for the purposes of this subsection if the lessor advises the auditor that the lessor has informed the lessee of the lessee’s opportunity under this subsection.

(3) The auditor must consider any written submissions made pursuant to subsection (2).

# 28A Non-provision of outgoings estimate or statement

(1) A lessee is entitled to withhold payment of contributions for outgoings if—

- (a) the lessor has failed to give the lessee a written estimate of outgoings required under section 27 or an outgoings statement required under section 28, and
- (b) the lessee has, at or after the expiry of the time when the estimate or statement was required to be given to the lessee, requested the lessor in writing to furnish the estimate or statement to the lessee, and
- (c) the lessor’s failure has continued for 10 business days after the request was made.

(2) The lessee must pay the withheld contributions within 28 days after the lessor furnishes the estimate or statement.

(3) The lessor is not entitled to recover interest or late payment charges in respect of contributions withheld in accordance with this section.

(4) The lessee is not in breach of the retail shop lease for acting in accordance with this section.

(5) This section does not affect any other rights that the lessee has in connection with the lessor’s failure to provide the estimate or statement.

# 29 Adjustment of contributions to outgoings based on actual expenditure properly and

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Retail Leases Act 1994 No 46 [NSW]

A retail shop lease is taken to include provision to the following effect—

1. There is to be an adjustment between the lessor and the lessee for each accounting period of the lessor to take account of any under-payment or over-payment by the lessee in respect of outgoings during the period. The adjustment is to take place within 1 month after the lessor gives the lessee the outgoings statement referred to in section 28 for the period concerned and must in any event take place within 4 months after the end of that period.
2. The adjustment is to be calculated on the basis of the difference between the total amount of outgoings in respect of which the lessee contributed (that is, the estimated total expenditure by the lessor on outgoings during the period concerned) and the total amount actually expended by the lessor in respect of those outgoings during that period, but taking into account only expenditure properly and reasonably incurred by the lessor in payment of those outgoings.
3. Contribution by the lessee towards, and expenditure by the lessor in respect of, repairs and maintenance is not to be taken into account for the purposes of the adjustment to the extent that the contribution is, and the expenditure is in respect of, contributions required to be paid into a sinking fund as referred to in section 25.

# 30 Non-specific outgoings contribution limited by ratio of lettable area

A lessee under a retail shop lease in a retail shopping centre is not liable to contribute towards a non-specific outgoing of the lessor (that is, an outgoing not specifically referable to any particular shop in the retail shopping centre) unless the shop is one of the shops to which the outgoing is referable, and is not liable to contribute an amount in excess of an amount calculated by multiplying the total amount of that outgoing by the ratio of the lettable area of the shop to the total of the lettable areas of all the retail shops to which the outgoing is referable.

An outgoing is referable to a retail shop if the shop is one of the shops that enjoys or shares the benefit resulting from the outgoing.

An outgoing on account of GST payable by the lessor in respect of rent payable under a lease is not a non-specific outgoing of the lessor for the purposes of this section.

Note.

This section prevents a lessee being required to make up for any shortfall in outgoings recouped by the lessor that is attributable to vacant shops or concessions allowed to other lessees.

# 31 Determination of current market rent

A retail shop lease that provides for rent to be changed to current market rent or that provides an option to renew or extend the lease at current market rent is taken to

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Retail Leases Act 1994 No 46 [NSW]

include provision to the following effect—

1. The current market rent is the rent that would reasonably be expected to be paid for the shop, as between a willing lessor and a willing lessee in an arm’s length transaction (where the parties are each acting knowledgeably, prudently and without compulsion), determined on an effective rent basis, having regard to the following matters—
1. the provisions of the lease,
2. the rent that would reasonably be expected to be paid for the shop if it were unoccupied and offered for renting for the same or a substantially similar use to which the shop may be put under the lease,
3. the gross rent, less the lessor’s outgoings payable by the lessee,
4. rent concessions and other benefits that are frequently or generally offered to prospective lessees of unoccupied retail shops.

The current market rent is not to take into account the value of goodwill created by the lessee’s occupation or the value of the lessee’s fixtures and fittings on the retail shop premises.
2. If the lessor and the lessee do not agree as to what the actual amount of that rent is to be, the amount of the rent is to be determined by valuation carried out by a specialist retail valuer appointed by agreement of the parties to the lease, or failing agreement, by the Registrar.
3. The matters set out in paragraph (a) are to be taken into account by a specialist retail valuer appointed under paragraph (b) in determining the amount of the rent.
4. The lessor must, not later than 14 days after being requested to do so by a specialist retail valuer appointed under paragraph (b), supply the valuer with information (where reasonably available to the lessor) requested in a list provided by the valuer to assist the valuer to determine the current market value, including the following information about leases for comparable retail shops in the same building or retail shopping centre—
1. current rental for each lease,
2. rent free periods or any other form of incentive,
3. recent or proposed variations of any lease,
4. outgoings for each lease,
5. and including any other information prescribed by the regulations.
5. A valuation for the purposes of paragraph (b) is to be in writing and to contain

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Retail Leases Act 1994 No 46 [NSW]

detailed reasons for the specialist retail valuer’s determination and to specify the matters to which the valuer had regard for the purposes of making his or her determination.

(f) The parties to the lease are to pay the costs of a valuation by a specialist retail valuer appointed under paragraph (b) in equal shares.

Note.

The procedure provided by this section can be avoided if the parties can come to an agreement as to what the rent is to be.

(1A) A party to a lease may apply to the Registrar for the appointment of a specialist retail valuer for the purposes of subsection (1) (b).

(1B) A party to a lease may make written submissions to a specialist retail valuer to assist in the valuer’s consideration of the valuation, and the valuer must consider any such written submissions.

(2) A specialist retail valuer must make a valuation of a current market rent for the purposes referred to in this section not later than 1 month after receiving the information referred to in subsection (1) (d).

(3) A specialist retail valuer may apply to the Tribunal under Part 8 for an order that a lessor comply with a request referred to in subsection (1) (d) to supply relevant information about leases for retail shops situated in the same building or retail shopping centre to assist the valuer to determine the rent.

(4) The reasons and matters included in a valuation as referred to in subsection (1) (e) must not be set out in a way that discloses information identifying other leases or parties to other leases or relating to the business of parties to other leases. This subsection does not apply to leases between the parties to the lease for which the valuation is made or to leases whose parties consent to the disclosure of the information.

# 31A Information supplied to valuer

(1) A specialist retail valuer who is supplied with information by a lessor or a lessee for the purpose of determining under section 31 the amount of rent under a retail shop lease must not—

- (a) use or permit the use of the information for any purpose other than to determine the current market rent for the lease concerned, or
- (b) communicate or divulge that information to any other person or permit that information to be communicated or divulged to any other person.

Maximum penalty—50 penalty units.

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Retail Leases Act 1994 No 46 [NSW]

(2) This section does not prevent the specialist retail valuer using or communicating or divulging that information, or permitting any other person to do so, in the following circumstances—

- (a) in accordance with a consent of both the lessor and the lessee,
- (b) to a court or tribunal,
- (c) in a way that does not disclose information identifying a particular lease or lessee, or relating to a lessee’s business, for the purpose of specifying the matters taken into consideration in making the determination concerned.

(3) A specialist retail valuer who contravenes this section is liable to pay to the lessor or lessee concerned compensation for any loss or damage suffered by the lessor or lessee as a result of the information being so used or communicated or divulged. The amount of the compensation is to be the amount agreed between the valuer and the person seeking compensation or, in the event of a failure to agree, as determined by the Tribunal.

# 32 Opportunity for lessee to have current market rent determined early

(1) A retail shop lease which provides an option to renew or extend the lease at current market rent is taken to include provision to the following effect—

- (a) The lessee is entitled to request a determination of the current market rent at any time within the period that begins 6 months before and ends 3 months before the last day on which the option may be exercised under the lease, but may not make such a request if the lessor and the lessee have already agreed as to what the actual amount of that rent is to be.
- (b) The lessee makes such a request by giving notice in writing of the request to the lessor.
- (c) If the lessee makes such a request, the amount of the current market rent is to be determined (as at the time of the request) in accordance with the provisions of section 31, and the period within which the lessee must exercise the option is varied so that the last day on which the option may be exercised is 21 days after the determination of rent is made and notified to the lessee in writing.
- If the determination of rent is not notified within 21 days before the end of the term of the lease, the lessee may exercise the option within 21 days after the determination is notified in writing to the lessee (whether before or after the term of the lease), and the term of the lease is extended by the appropriate period to enable the lessee to exercise the option after the lease would otherwise expire.
- (d) The parties agree that the amount of rent determined under paragraph (c) is the current market rent for the purposes of the exercise of the option (even though it

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Retail Leases Act 1994 No 46 [NSW]

(e) The parties to the lease are to pay the costs of the determination of current market rent in equal shares.

(2) If the term of the lease is 12 months or less, the periods of 6 months and 3 months in this section are shortened to 3 months and 30 days respectively.

# 32A Review of current market rent determinations

(1) Application for review A party to a lease may apply to the Registrar for the appointment of two specialist retail valuers to conduct a review of a determination of the current market rent made by a specialist retail valuer made under section 31.

(2) The application for a review must be made within 21 days after the party first received a copy of the determination. Note. Subsection (13) provides another opportunity to make an application for a review if the decision on the review is set aside.

(3) Review by and decision of valuers The specialist retail valuers may conduct the review and may jointly—

- (a) affirm the reviewed determination, or
- (b) vary the reviewed determination.

(4) Sections 31 and 31A apply (with any necessary adaptations) to and in respect of the specialist retail valuers in the same way as those provisions apply to and in respect of the original specialist retail valuer.

(5) Without limiting subsection (4), the specialist retail valuers jointly and severally have the powers and obligations of the original specialist retail valuer in connection with obtaining information under the provisions referred to in that subsection.

(6) The specialist retail valuers are to conduct the review and reach their decision not later than one month after they are notified of their appointment.

(7) If the specialist retail valuers are unable to agree by the end of the month referred to in subsection (6), the valuers are taken to have decided to affirm the determination.

(8) Access to original determination and information It is the duty of the specialist retail valuer (the original valuer) who made the original determination, and of each party to the lease, to ensure that the specialist retail valuers reviewing the determination are given access to—

- (a) the original determination, and

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Retail Leases Act 1994 No 46 [NSW]

(b) information relating to the matters, specified in the original determination, to which the original valuer had regard to in making the original determination, to the extent that the information is available to the original valuer or party, unless the specialist retail valuers indicate that they do not require access to the determination or information to be given to them under this subsection.

# (9) Costs of review

The following provisions apply to the costs of the review by the specialist retail valuers—

- (a) the parties to the lease are to pay the costs of the review in equal shares, unless paragraph (b) applies,
- (b) the party who applies for the appointment of the specialist retail valuers is to pay the costs of the review, if the current market value is jointly determined by the specialist retail valuers to be the same as or within 10 per cent of the amount specified in the original determination.
- (c) (Repealed)

# (10) Effect, finality and setting aside of decision

A varied determination has effect as if it were the original determination.

# (11) Subject to subsection (12)

The joint decision of the specialist retail valuers is final and binding on the parties to the lease.

# (12) The Tribunal

- (a) may, on application made by a party to the lease within 21 days after the decision of the specialist retail valuers is given, order that the decision be set aside, if satisfied that the valuers have manifestly made a fundamental error warranting such an order, and
- (b) may also order that the costs of the review are not payable by the parties or, if paid, are to be refunded.

The decision is not otherwise reviewable by or appellable to the Tribunal.

# (13) If the decision is set aside

A party to the lease may make a fresh application to the Registrar under subsection (1) in relation to the original determination within the period of 21 days after the date of the order setting it aside, and this section applies accordingly.

# 32B Appointment of specialist retail valuers

- (1) The Registrar may appoint specialist retail valuers on application under this Act.
- (2) The appointment of a specialist retail valuer is to be made from separate lists of nominees prepared separately by or on behalf of the persons for the time being.

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