Retail Shop Leases Amendment Bill 2015
Plain English Summary
Overview
This bill rewrites the rules for retail shop leases in Queensland, following a long statutory review of the Retail Shop Leases Act 1994. It tightens what landlords must disclose to tenants, makes centre outgoings and marketing spending more transparent, frees outgoing tenants and their guarantors from ongoing liability when they assign a lease, and removes coverage of the Act from large shops over 1000m2 and predominantly non-retail tenancies.
Who it affects
Small shop tenants in shopping centres, their guarantors, franchisees, sublessees and shopping centre landlords are the main groups affected. Large retailers over 1000m2 and professional offices in predominantly non-retail buildings lose the Act's protections.
Key changes
- Landlords must give tenants a fresh disclosure statement within 7 days after a lease is renewed, and tenants can withdraw their renewal within 14 days
- When a tenant sells and assigns their lease, both the tenant and any personal guarantor are released from future liability, so long as disclosure was done properly
- Shops larger than 1000m2 and non-retail tenancies in predominantly non-retail buildings are no longer covered by the Act
- Landlords must publish an annual marketing plan and itemise centre outgoings and management fees, with any unspent promotion money carried forward
- Refurbishment clauses are void unless the lease spells out the nature, extent and timing of the work
- Landlords become liable for the cost of getting their own mortgagee's consent, and cannot pass most lease preparation costs onto tenants
- Landlords are not liable to pay business-disruption compensation for reasonable emergency responses or acts done to comply with the law
- QCAT and mediators gain jurisdiction over retail shop lease disputes about rent arrears
Bill Story
The journey of this bill through Parliament, including debate and recorded votes.
▸Committee13 Oct 2015View Hansard
Referred to Legal Affairs and Community Safety Committee
The Education, Tourism and Small Business Committee examined the bill and recommended it be passed, with six additional recommendations requesting the Attorney-General address various stakeholder concerns during the second reading debate. The bill arose from a statutory seven-year review of the Retail Shop Leases Act 1994, with extensive industry consultation. The government supported all recommendations and agreed to move several amendments during consideration in detail.
Key findings (5)
- The bill implemented the outcomes of the statutory seven-year review of the Retail Shop Leases Act 1994, informed by an industry and legal stakeholder reference group
- A key change excluded all retail shop leases with a floor area greater than 1,000 square metres from the Act, on the basis that those tenants are sophisticated businesses not requiring its protections
- The Queensland Law Society raised concerns about several provisions including the new section 11A (lease renewal), disclosure obligations for sub-lessors and franchisors, and the lessor objection procedure for lease terminations
- North Queensland Airports raised concerns about potential limits on retail business operating hours at Cairns and Mackay airports, though the government concluded those concerns were outside the scope of the bill
- The bill strengthened disclosure obligations for lessors, including requiring updated disclosure to sitting tenants before lease renewal under an option
Recommendations (7)
- The committee recommends that the Retail Shop Leases Amendment Bill 2015 be passed.
- The committee recommends that during the second reading debate, the Attorney-General inform the House of the likely commencement date and how businesses and stakeholders will be informed of their obligations.
- The committee recommends that during the second reading debate, the Attorney-General inform the House how the department intends to monitor the exclusion of retail leases over 1,000 square metres and whether this issue will form part of the next seven-year review of the Act.
- The committee recommends that during the second reading debate, the Attorney-General inform the House whether further consideration has been given to the Queensland Law Society's proposal for amendment to new section 11A.
- The committee recommends that during the second reading debate, the Attorney-General inform the House of the outcome of the further consideration of a potential amendment to clauses 21C and 21D.
- The committee recommends that during the second reading debate, the Attorney-General inform the House if further consideration has been given to the Queensland Law Society's concerns about proposed section 21F.
- The committee recommends that during the second reading debate, the Attorney-General inform the House what consideration is being given to the North Queensland Airports concerns about potential limits on the hours of operation of retail businesses and the potential to erode existing retail lease provisions.
Committee report tabled
▸Second Reading10 May 2016View Hansard
▸19 members spoke19 support
Moved the second reading as Attorney-General, outlining the bill's purpose of giving effect to the statutory review of the Retail Shop Leases Act 1994 to reduce red tape and enhance protections for both lessees and lessors.
“As a member of the Palaszczuk Labor government, I am proud to present a bill to the House that will reduce red tape and provide enhanced protections and benefits for both retail shop lessees and lessors.”— 2016-05-10View Hansard
Announced LNP support for the bill, noting it is effectively the reintroduction of the former LNP government's 2014 bill and crediting the extensive consultation and reference group process.
“I suppose it should not surprise the House that the LNP will not be opposing this legislation because it is effectively our bill.”— 2016-05-10View Hansard
Spoke as committee chair, outlining the committee's consideration of the bill and its recommendations, including addressing North Queensland Airports' concerns about trading hours.
“This bill protects both parties, the lessor and the lessee, when engaging in a retail shop lease.”— 2016-05-10View Hansard
Supported the bill, emphasising its significance for Queensland's 400,000 small businesses and the red-tape reduction it delivers, while crediting the LNP's role in originating the legislation.
“Small businesses are the backbone of this state. There are 400,000 small businesses in this state employing more than a million people.”— 2016-05-10View Hansard
Supported the bill, noting the thorough consultation process and the importance of not unduly interfering in commercial markets while protecting small business interests.
“This parliament should not unduly interfere in the market because that leads to sometimes unintended consequences for all parties concerned.”— 2016-05-10View Hansard
Drew on personal experience as a former shopping centre tenant to support the bill, recalling how the original 1994 act protected small businesses from multinational shopping centre operators.
“I know from firsthand experience what it is like to deal with multinational shopping centres. You turn up with your solicitors and they turn up with three other solicitors plus four other people to intimidate you.”— 2016-05-10View Hansard
Supported the bill from the perspective of nearly two decades of experience in retail shopping centre management, welcoming the modernisation of aged legislation and improvements to negotiation processes.
“I am confident from my nearly two decades of industry knowledge and involvement that this bill will reduce red tape and deliver improved flexibility to allow both parties involved to proceed with a lease without unnecessary delays.”— 2016-05-10View Hansard
Supported the bill's measures to reduce red tape and improve transparency for retail tenants, particularly the exclusion of non-retail leases and enhanced disclosure requirements.
“The reduction in red tape, the improvements to transparency for tenants in relation to management and marketing expenditure go a long way in protecting retail tenants and small businesses in Queensland.”— 2016-05-10View Hansard
Supported the bill as a committee member, highlighting its importance for local small businesses in the Albert electorate and the protections it provides regarding lease obligations.
“When we embarked on this process we had no idea. It was terrifying for us. Were we going to be paying for the costs of refitting the shop if the lease was terminated?”— 2016-05-10View Hansard
Supported the bill as addressing imbalances in negotiating power, drawing a parallel between small business tenants facing large landlords and workers facing large employers.
“Since taking on this job, I have become very aware that small business owners are subject to the same kinds of economic pressures as low-paid workers.”— 2016-05-10View Hansard
Supported the bill for its enhanced protections for small business lessees, including the low-cost dispute resolution process for tenants negotiating with large shopping centre operators.
“Small business is the economic powerhouse of this state. They are absolutely the backbone of the Queensland economy. They are the creators of wealth and they are the growers of jobs.”— 2016-05-10View Hansard
Supported the bill as a former committee member, highlighting local businesses in the Gaven electorate that would benefit from the transparency and protection measures.
“The LNP gets small business. We understand the need to remove unnecessary regulation, reduce compliance costs and simplify processes.”— 2016-05-10View Hansard
Spoke as Minister for Small Business, supporting the bill as part of the Palaszczuk government's broader commitment to helping small businesses grow, alongside initiatives like the Red Tape Reduction Advisory Council.
“Small businesses are the engine room of the Queensland economy, and this bill makes it easier for small businesses to grow, thrive and continue to contribute to the Queensland economy.”— 2016-05-10View Hansard
Drew on personal experience as a former small business owner on the Gold Coast to support the bill, recounting difficulties with shopping centre lease negotiations at Pacific Fair and the Paradise Centre.
“Some of the tactics in the past by shopping centre operatives have not been that pleasant for small tenants to deal with.”— 2016-05-10View Hansard
Supported the bill for its protections for small retailers in large shopping centres like Caneland in Mackay, emphasising the importance of disclosure requirements for lessees.
“Knowledge is power and vital in successful business negotiations.”— 2016-05-10View Hansard
Supported the bill for providing a transparent framework to address the imbalance between landlords and small retail tenants, while noting it was substantially based on work progressed by the LNP.
“Governments should never be an impediment to the endeavours of the private sector.”— 2016-05-10View Hansard
Spoke as Minister for Housing and Public Works, noting the bill would simplify government tenancy management in shopping centres, with the department managing 730 commercial leases including police beats and health services.
“The Attorney has consulted widely with industry and stakeholders and produced a bill that strikes an important and good balance between safeguarding tenants' interests and not interfering in genuine commercial arrangements.”— 2016-05-10View Hansard
Supported the bill for providing protection for small business lessees, highlighting the difficult economic conditions in the Mackay-Whitsunday region and the impact of a devastating fire at the Whitsunday shopping centre.
“It goes without saying that I support the bill.”— 2016-05-10View Hansard
Drew on experience as a former graduate lawyer working on retail shop leases to support the bill, particularly welcoming the release of assignor guarantors on lease assignment and the 1,000 square metre exclusion.
“This is very good Labor legislation because it makes sure that, wherever possible, we provide a level playing field so that there is less imbalance in negotiating power and minimum standards for everyone to play by.”— 2016-05-10View Hansard
▸In Detail10 May 2016View Hansard
Omits new section 11A regarding when an assignment of lease is entered into, maintaining the status quo under the act, in response to Queensland Law Society concerns about the drafting and operation of the provision.
Amendments 2 to 7 to clause 15: clarifying franchise and sublease disclosure provisions and omitting the lessor objection and dispute resolution provisions in new sections 21F(5) to 21F(9), in response to Queensland Law Society concerns about adverse commercial impacts for lessees seeking to terminate leases.
Amendments 8 to 13 to clause 16: waiving the existing seven-day assignor disclosure period in section 22B, requiring the assignor to provide a copy of the current lease alongside the disclosure statement, and allowing a prospective assignee to give a waiver notice with legal advice confirmation.
Amendments 14 and 15 to clause 60: technical amendments omitting transitional provisions consequential to the removal of section 11A and the lessor objection provisions.
Amendment 16 to clause 61: technical amendment to the dictionary consequential to the omission of new section 11A.
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Sectors Affected
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