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Retail Tenancy

A retail lease defines the relationship between a landlord and a tenant of retail premises.  It is important to understand your rights and responsibilities fully as a retail tenant or landlord.

 

Unless you have experience in commercial/retail leasing, it is recommended that you seek professional legal and/or financial advice before entering an agreement.

 

Code of practice for retail tenancies

The Code of Practice for Retail Tenancies applies to the operation of retail tenancy arrangements within Tasmania entered into from 1 September 1998.  It applies to the negotiation of new retail lease agreements, as well as the performance and renewal of those agreements.

 

Leases entered into prior to 1 September 1998 that have not been varied since that date, including options to renew contained in those agreements, are known as 'Pre-code' leases and are not covered by the Code.

 

The Code applies to:

 

  • all retail premises with a floor space of 1,000 square metres or less;  and
  • all small premises in shopping centres.

 

Bonds

 

Generally, retail/commercial tenants are required to provide the property owner with some form of security such as a bond or bank guarantee to cover any outstanding debts, damage or other issues with the condition of the premises at the end of a tenancy.  Retail or commercial bonds are not required to be lodged with the Rental Deposit Authority (RDA).

 

Ending a lease

 

Six months (or any other period specified in the lease) before your lease ends, the landlord needs to write and advise you whether they plan to offer you a new lease or not.  If you haven't received this written notification, write and ask for it before the lease ends.  This will give you up to six more months on the lease from the time you receive the notice.  If the six months extends past the date your lease was due to expire, you can terminate the agreement during  the extension period with one month's written notice.

 

Tenants usually have to return the shop to the condition it was in when the lease started, which generally includes such things as repainting, removal of fixtures and fittings and repairs of any damage caused throughout the tenancy.  The tenant will usually be responsible for these costs.

 

Dispute resolution

 

The Code establishes a process to resolve disputes arising from the agreement which states:

 

  • retail tenants and property owners must first attempt to resolve disputes by means of direct negotiation;
  • if unsuccessful, either party may request the Office of Consumer Affairs and Fair Trading to attempt to negotiate a solution; or
  • either party may refer it to a court for hearing.