In a submission to the Office of the NSW Small Business Commissioner, REINSW has proposed the introduction of a standard retail lease as a “natural evolution” of the Retail Leases Act 1994 (NSW).
“A standard retail lease will help landlords and retail tenants avoid waiting months for leases to emerge from an unnecessarily long and costly legal process,” REINSW CEO Tim McKibbin said. “Just as a standard residential lease, once signed, enables the tenants to move into a property quickly, a standard retail lease will allow retail tenants to get to work in a more timely manner.
According to Mr McKibbin, the overwhelming majority of landlords and retail tenants find themselves at the mercy of unnecessary legal negotiations, even though they’ve reached agreement.
“This means that businesses that are otherwise ready to trade, as well as landlords requiring income from rent, are left to wait,” he explained. “The end of JobKeeper heightens the urgency of addressing these pointless delays.”
Mr McKibbin said that wasting time and money on legal fees on an unnecessarily complex retail lease is unacceptable, particularly when a simpler pathway is available.
“It’s typical for landlords and retail tenants to agree to the fundamental terms of the lease, only for their legal representatives to be unable to resolve the peripheral terms,” he said. “This is a roadblock to an otherwise mutually beneficial relationship.
“There’s an opportunity for the NSW Government to prescribe a standardised, broadly applicable and simple to decipher retail lease, and the opportunity to do this has never been more timely.”
Mr McKibbin explained that the introduction of a standard retail lease will also have significant advantages when it comes to dispute resolution, as there will be no need for the NSW Civil and Administrative Tribunal to labour over the precise interpretation and application of disputed clauses. Further, it will promote a better understanding of the rights and obligations of landlords and retail tenants.