Retail Leases Regulations 2003

i Retail Leases Regulations 2003 S.R. No. 30/2003 TABLE OF PROVISIONS Regulation Page 1. Objectives 1 2. Authorising provisions 1 3. Commencement 1 4. Revocation 2 5. Definitions 2 6. Excluded retail premises 2 7. Prescribed kinds of outgoings and other costs 3 8. Disclosure statement 4 9. Small Business Commissioner to be notified of lease 4 10. Determination and apportionment of outgoing 4 11. Maximum outgoing 4 12. Statement of outgoings 4 13. Advertising or promotion adjustment 5 __________________ SCHEDULE 1—Disclosure Statement 6 ═══════════════ ENDNOTES 17 -- 1 of 18 -- 1 STATUTORY RULES 2003 S.R. No. 30/2003 Retail Leases Act 2003 Retail Leases Regulations 2003 The Governor in Council makes the following Regulations: Dated: 23 April 2003 Responsible Minister: MARSHA THOMSON Minister for Small Business KATE HASTINGS Acting Clerk of the Executive Council 1. Objectives The main objectives of these Regulations are— (a) to make provision with respect to the amount of occupancy costs for the purpose of excluding certain retail premises; and (b) to make provision with respect to the amount of outgoings payable by a tenant; and (c) to prescribe the form of the landlord's disclosure statement. 2. Authorising provisions These Regulations are made under sections 4(2)(a), 25(d), 39(2), 40(2), 47(5)(b)(i), 72 and 99 of the Retail Leases Act 2003. 3. Commencement These Regulations come into operation on 1 May 2003. -- 2 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 2 4. Revocation (1) The Retail Tenancies Reform Regulations 19981 are revoked. (2) Despite sub-regulation (1), the Retail Tenancies Reform Regulations 1998 continue to have effect for the purposes of the continued application of the Retail Tenancies Reform Act 1998 as provided by section 119 of the Retail Leases Act 2003 to a retail premises lease to which the Retail Tenancies Reform Act 1998 applied immediately before its repeal. 5. Definitions In these Regulations— "Act" means the Retail Leases Act 2003; "relevant fraction" means the fraction calculated using this formula— B A where— "A" is the lettable area of the retail premises; and "B" is the total of lettable areas of all the retail premises which receives the benefit of the outgoing. 6. Excluded retail premises For the purposes of section 4(2)(a) of the Act, the prescribed amount is $1 000 000 per annum. r. 4 -- 3 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 3 7. Prescribed kinds of outgoings and other costs (1) For the purposes of section 4(3)(b) of the Act, the following kinds of outgoings are prescribed— (a) amenity facilities, including gardening and landscaping, public address and music systems; (b) building or retail shopping centre management services, including temperature control, insurance, pest control and ventilation; (c) communication facilities, including telephones and post boxes; (d) customer facilities, including car parking, lifts, escalators, and child minding; (e) hygiene services, including cleaning, garbage collection and disposal, sewerage and waste disposal; (f) information services, including customer traffic flow and other building intelligence information, information directories and signage; (g) rates, taxes, levies, premiums, charges and fees, including municipal council rates and charges, sewerage and drainage rates and charges, administration costs, audit fees and management fees; (h) repairs and maintenance services; (i) security services, including emergency systems and fire protection equipment; (j) utility services, including electricity, gas, oil, water and energy management systems. r. 7 -- 4 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 4 (2) For the purposes of section 4(3)(c) of the Act, advertising and promotional services, including marketing fund contributions, is prescribed as an other kind of cost. 8. Disclosure statement The form of disclosure statement prescribed for the purposes of sections 17(1)(a), 26(1) and 61(4) of the Act is in Schedule 1. 9. Small Business Commissioner to be notified of lease For the purposes of section 25(d) of the Act, the following other matters are prescribed— (a) the lease expiry date; and (b) the date on which or the period within which an option may be exercised, if any; and (c) the landlord's e.mail address, if any; and (d) the tenant's e.mail address, if any. 10. Determination and apportionment of outgoing For the purposes of section 39(2) of the Act, the amount of an outgoing may be determined and apportioned to a tenant by multiplying the total amount of the outgoing by the relevant fraction. 11. Maximum outgoing For the purposes of section 40(2) of the Act, a tenant is not liable to contribute towards an outgoing of the landlord in excess of an amount calculated by multiplying the total amount of the outgoing by the relevant fraction. 12. Statement of outgoings For the purposes of section 47(5)(b)(i) of the Act, the prescribed percentage is 10 percent. r. 8 -- 5 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 5 13. Advertising or promotion adjustment For the purposes of section 72(3) of the Act, the adjustment is to be made on a pro rata basis, only taking into account expenditure during the term of that lease. __________________ r. 13 -- 6 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 6 SCHEDULE 1 DISCLOSURE STATEMENT by the landlord under the Retail Leases Act 2003 NOTE This statement is to be completed by the Landlord and should be provided to the Tenant along with the Information Brochure about retail leases published by the Small Business Commissioner and a copy of the lease at least 7 days before the signing of a new lease. The Information Brochure is also available at the Office of the Small Business Commissioner. If the Tenant has exercised or is entitled to exercise an option to renew a retail premises lease, the Landlord is required to provide this statement to the Tenant at least 21 days before the end of the current term. In the situation where all of the parties to a retail premises lease enter into an agreement to renew the lease, the Landlord is required to provide this statement to the Tenant at least 14 days after the entering into of the agreement. The layout of this statement does not need to be the same as the prescribed disclosure statement in the Retail Leases Regulations 2003. It is prudent for a Tenant to obtain independent legal and financial advice before entering into a retail premises lease. The Tenant has remedies including termination of a lease under the Retail Leases Act 2003 if information in this statement is misleading, false or materially incomplete. Information contained in this statement is correct as at the date of this statement but may change after the date of this statement and during the term of the lease. PART 1—THE LANDLORD Landlord Landlord's address Responsible Entity (if applicable) Responsible Entity's address (if applicable) Landlord's Agent (if applicable) Landlord's Agent's address (if applicable) Sch. 1 -- 7 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 7 PART 2—THE TENANT Tenant Tenant's address Tenant's trading name (if applicable) PART 3—THE PREMISES Shop number (if premises are within a Retail Shopping Centre) Address of premises (insert address if premises are not within a Retail Shopping Centre, provide name of Centre if premises are within a Retail Shopping Centre) Lettable area of premises (in square metres) (State whether actual or estimated and, if estimated only, whether a survey will be conducted) Structure, fixtures, plant, equipment and services to or in the premises provided by the Landlord Is the Tenant required to contribute to the cost of structure, fixtures, plant, equipment and services to or in the premises provided by the Landlord? If so, to what extent? PART 4—THE RETAIL SHOPPING CENTRE NOTE Part 4 of this statement must be completed only if premises are located within a Retail Shopping Centre. Centre details The total number of retail premises in the Centre Lettable area of the Centre (State whether actual or estimated and, if estimated only, why estimated only and when actual will be available) Number of car park bays at the Centre, in total Number of car park bays at the Centre for the Tenant's exclusive use Core trading hours of the Centre Hours of access to Premises outside core trading hours of the Centre: Floor plan of the Centre (attach copy of floor plan) Sch. 1 -- 8 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 8 Tenancy mix (by category) of the Centre Is the tenancy mix of the Centre likely to change over the term of the lease? Yes/No If so, provide details of presently known, or likely, changes. Does the centre collect customer traffic flow information? Yes/No If so, provide details. Has the Landlord obtained planning approval for any renovations, redevelopments or extensions of the Centre? Yes/No If so, provide details. Does the Landlord permit casual mall leasing? Yes/No Does the Landlord have a policy on casual mall leasing which is available to the Tenant on request? Yes/No If so, what arrangements are made for casual leasing in the Centre? PART 5—THE LEASE Section A—Term NOTE Under the Retail Leases Act 2003, tenants have the right to a minimum five year tenancy. The Tenant may waive this right if the Tenant applies to and obtains a certificate from the Small Business Commissioner. Term Options for further terms (if applicable) Date or dates between which the option may be exercised Actual date (or estimated date if actual date is not known) that Landlord will hand over premises to Tenant (State whether actual or estimated date and, if estimated, how actual to be determined) Actual date (or estimated date if actual date is not known) that lease will commence (State whether actual or estimated date and, if estimated, how actual to be determined) Sch. 1 -- 9 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 9 Section B—Permitted Use of Premises Permitted use of premises The Tenant will have exclusive rights to sell the following goods or services The Tenant may not sell the following goods or services Section C—Occupancy Costs - overview For the purposes of the Act, the Occupancy Costs for this lease are: (a) rent (excluding rent based on turnover) (section D) (b) total prescribed outgoings (section E or section F) (c) tenant's contribution to the marketing fund (section G) Total NOTE A lease with Occupancy Costs greater than $1 000 000 p.a. is not covered by the Retail Leases Act 2003. Section D—Rent Payable The rent payable by the Tenant for the term of the Lease is: Period* Rent* (e.g. Year 1 + x%) Adjustment method on review (e.g. Fixed increase x%) * Based on estimated commencement date, if actual date not known The rent is payable as follows: Date for rent payments under the Lease: (e.g. By equal monthly instalments in advance on the first day of each month except for the first and last payments which will be calculated on a pro-rata basis) Date for first payment of rent under the Lease: (e.g. State Commencement Date or, if a rent free period, specify details of the rent free period) Sch. 1 -- 10 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 10 Is the Tenant required to pay any rent based on turnover? Yes/No If yes, how is that rent calculated? (Include the percentage of gross sales, the base from which percentage rent cuts in and whether that base changes) Section E—Outgoings (for Retail Shopping Centres only) NOTE Part 5, Section E of this statement must be completed only if premises are located within a Retail Shopping Centre and the lease requires the Tenant to contribute (in whole or in part) to any outgoings of the Centre. The estimated outgoings for the Retail Shopping Centre for the current outgoings year are set out below. This estimate was prepared at the commencement of the outgoings year. Actual outgoings will be calculated and reconciled with appropriate adjustments made at the end of the outgoings year. This estimate of outgoings only relates to the landlord's outgoings that are recovered from the tenant and does not include any separately metered outgoings incurred by tenants. Outgoings category Estimate per annum (including GST) Amenity facilities Gardening and landscaping Public address and music systems Building or retail shopping centre management services Temperature control Insurance Pest control Ventilation Communication facilities Telephones Post boxes Sch. 1 -- 11 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 11 Outgoings category Estimate per annum (including GST) Customer facilities Car parking Lifts Escalators Child minding Hygiene services Cleaning Garbage collection and disposal Sewerage and waste disposal Information services Customer traffic flow Other building intelligence information Information directories Signage Rates, taxes, levies, premiums, charges and fees Municipal council rates and charges Sewerage and drainage rates and charges Administration costs Audit fees Management fees Repairs and maintenance services Security services Emergency systems Fire protection equipment Sch. 1 -- 12 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 12 Outgoings category Estimate per annum (including GST) Utility services Electricity Gas Oil Water Energy management systems Total prescribed outgoings Other outgoings (if any) Total outgoings Core Trading Hours Outgoings (Note that the Shop Trading Reform Act 1996 provides that all shops, except exempt shops, must be closed and kept closed during ordinary shop closing times) Formula for calculating tenant's contribution to after hours outgoings Formula for calculating tenant's contribution to outgoings directly assessed on Premises Formula for calculating tenant's contribution to services (gas, telephone, electricity, water, etc.) (State whether the Tenant will be required to pay direct to the supply authority for water supplied, gas, telephone and electricity supplied to and consumed in the premises or whether they will be part of outgoings) Section F—Outgoings (for premises not located in a Retail Shopping Centre) NOTE Section F, Part 5 of this statement must be completed only if premises are not located within a Retail Shopping Centre and the lease requires the Tenant to contribute (in whole or in part) to any outgoings of the Landlord. The estimated outgoings for the building in which the Premises are located for the current outgoings year are set out below. This estimate was prepared at the commencement of the outgoings year. Actual outgoings will be calculated and reconciled and, where appropriate, adjustments made at the end of the outgoings year. Sch. 1 -- 13 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 13 This estimate of outgoings only relates to the landlord's outgoings that are recovered from the tenant and does not include any separately metered outgoings incurred by tenants. Outgoings category Estimate per annum (including GST) Building or retail shopping centre management services Temperature control Insurance Pest control Ventilation Communication facilities Telephones Customer facilities Car parking Lifts Hygiene services Cleaning Garbage collection and disposal Sewerage and waste disposal Information services Information directories Signage Rates, taxes, levies, premiums, charges and fees Municipal council rates and charges Sewerage and drainage rates and charges Administration costs Audit fees Management fees Sch. 1 -- 14 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 14 Outgoings category Estimate per annum (including GST) Repairs and maintenance services Security services Emergency systems Fire protection equipment Utility services Electricity Gas Oil Water Energy management systems Total prescribed outgoings Other outgoings (if any) Total outgoings Core Trading Hours Outgoings (Note that the Shop Trading Reform Act 1996 provides that all shops, except exempt shops, must be closed and kept closed during ordinary shop closing times) Formula for calculating tenant's contribution to after hours outgoings Formula for calculating tenant's contribution to outgoings directly assessed on Premises Formula for calculating tenant's contribution to services (gas, telephone, electricity, water, etc.) (State whether the Tenant will be required to pay direct to the supply authority for water supplied, gas, telephone and electricity supplied to and consumed in the premises or whether they will be part of outgoings) Sch. 1 -- 15 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 15 Section G—Promotions and marketing The following marketing and promotional expenses are payable during the Term of the Lease: Promotional and marketing expenses items Estimate per annum (including GST) Tenant's contribution to promotion/marketing fund Landlord's contribution PART 6—ASSIGNMENTS NOTE Part 6 of this statement must also be completed if lease assignment is proposed. Has the assignor provided the assignee with a copy of the landlord's disclosure statement? Yes/No Has the assignor provided the assignee with details of any changes of which the assignor is aware, that could have affected the information in the landlord's disclosure statement? Yes/No If so, provide details. Has the assignor provided the assignee with business records for the previous 3 years or such shorter period as the assignor has carried on business at the premises? Yes/No PART 7—TENANT'S FIT OUT AND/OR REFURBISHMENT WORKS The Landlord requires the Tenant to perform, at the Tenant's expense, the following fit out and/or refurbishment works: Before the commencement date of the lease During the Term PART 8—RELOCATION/DEMOLITION Does the lease include a relocation clause? Yes/No Does the lease include a termination clause which applies in cases other than breach of a lease? Yes/No Does the lease include a demolition clause? Yes/No Sch. 1 -- 16 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 16 PART 9—ADDITIONAL REPRESENTATIONS The following representations were made by the Landlord, the Responsible Entity or the Landlord's Agent to the Tenant during negotiations for the Lease PART 10—DECLARATIONS BY THE LANDLORD OR THE LANDLORD'S AGENT I acknowledge that this Statement contains all representations in relation to the proposed lease by the Landlord and the Landlord's Agent and I am satisfied that all agreements are fully reflected in this Statement. I have not knowingly withheld information which is likely to have an impact on the Tenant's proposed business. Signed by the Landlord or the Landlord's Agent for and on behalf of the Landlord Date ═══════════════ Sch. 1 -- 17 of 18 -- S.R. No. 30/2003 Retail Leases Regulations 2003 17 ENDNOTES 1 Reg. 4(1): S.R. No. 82/1998. Endnotes -- 18 of 18 --