Commercial Law Lawyers in Kippa-Ring

That is the question to settle before any other. The Act covers a retail shop lease — premises situated in a retail shopping centre, or used wholly or predominantly for carrying on a retail business — and it does not apply to a shop with a floor area of more than 1,000m². A retail shopping centre has its own statutory definition: a cluster of five or more premises used wholly or predominantly for retail businesses, under one owner, one lessor or a single community titles scheme, in one building or adjoining buildings, and promoted or generally regarded as a shopping centre, mall, court or arcade. Being in a building with other tenants does not settle it. We answer the coverage question first, then read the lease on that footing.

For a retail shop lease the Act requires the lessor to give a prospective tenant a draft of the lease and a disclosure statement at least 7 days before the tenant enters into the lease. Where that is not done, or the statement is defective — incomplete in a material particular, or false or misleading in a material particular — the Act allows the tenant to terminate by written notice within 6 months after entering into the lease. That is not automatic: the 7 days can be waived by a waiver notice, the section does not apply to a renewal under an option, and termination is unavailable where the lessor acted honestly and reasonably and the tenant is in substantially as good a position as it would have been. We check what was given and when, and explain what the landlord can say in answer. We do not tell anyone they have a right to terminate their particular lease.

Under the Act a retail shop tenant is not liable to pay outgoings unless the lease specifies which outgoings are payable, how they will be determined and apportioned, and how they may be recovered, and the tenant's share cannot exceed its proportionate area. The lessor must give an annual estimate at least 1 month before the period it covers and an audited annual statement within 3 months after the period ends, with items broken up so no single item exceeds 5% of total outgoings, apart from statutory charges and items that cannot be itemised further. The Act does allow a tenant to withhold payments in relation to apportionable outgoings until the estimate or audited statement is given — but that is limited to apportionable outgoings and does not extend to rent, so get advice on your own lease before stopping any payment.

Where a retail shop lease contains an option to renew, the Act requires the lessor to give the tenant written notice of the option date at least 2 months but not longer than 6 months before it. We read the option clause, identify the option date and the exercise mechanics in the lease itself, and check what notice the landlord has actually given. Where the lease is not a retail shop lease, the option stands or falls on the lease wording alone.

For a retail shop lease with no option and no renewal agreement, the Act requires the lessor to give the tenant written notice within the notice period either offering a renewal or extension on stated terms, including terms about rent, or telling the tenant it does not intend to offer one. An offer cannot be revoked until 1 month after it is made, or if the tenant accepts within that month. If the lessor does not comply, the term of the lease is extended until 6 months after the lessor gives that notice. We confirm first whether the tenancy is inside the Act, then read the lease to see whether it truly contains no option.

Not necessarily, and this is where the coverage question is hardest to answer from the outside. A non-retail business inside a centre may fall outside the Act where retail use on that level is only a small minority of the lettable area. Which trades count as prescribed retail businesses is set by regulation, so it is not something to be judged from the look of a shopfront. Consulting room, allied health and similar tenancies inside a centre need the coverage question answered on the documents and the premises rather than by assumption.

A retail tenancy dispute is lodged with the Queensland Small Business Commissioner for mediation first, and on and after the lodgement of a dispute notice the dispute must not be referred to arbitration or heard by any court. The mediator refers it to QCAT where the parties cannot reach a mediated solution, where a party does not attend, or where it is not settled within 4 months after the dispute notice is lodged — and only where the lease has not ended more than 1 year before the notice was lodged. QCAT's jurisdiction stops at the District Court monetary limit, currently $750,000, and QCAT cannot decide the actual amount of rent payable or the amount of a lessor's outgoings, only the procedure and basis for determining them. An ordinary commercial dispute follows a different pathway, which is why we work out which one you are in first.