The retail leasing industry and small businesses throughout NSW will benefit from retail lease reforms introduced into State Parliament, according to the Real Estate Institute of New South Wales.
REINSW CEO Tim McKibbin said amendments to the Retail Leases Act 1994 (NSW) will make doing business easier for tenants, agents and landlords on the retail strip.
“Some 44,500 retail businesses throughout NSW are set to benefit from reforms,” Mr McKibbin said.
“For agents, simplifying and streamlining the Act in how it deals with issues like assignment, will make leasing easier. Introducing steps to improve certainty for all players in the market is a good thing.
“REINSW have been heavily involved in an extensive consultation process, driven by the Office of the NSW Small Business Commissioner, which led to the draft bill.”
Mr McKibbin said this was a major step for the industry and more could be done to further simplify and strengthen the retail leasing environment.
“Introducing a standard mandatory lease for retail tenancies, similar to residential leases, would make doing business quicker and easier for tenants, agents and landlords on the retail strip by improving certainty and keeping costs down,” Mr McKibbin said.
The Residential Tenancy Agreement is a mandatory standard document that is easily understood. The landlord and tenant enter into the agreement without delay with an understanding of their rights and obligations.
“This model could and should be adopted for retail leasing saving the parties time and money. Most retail leases in the current market are often deliberately and unnecessarily complex and therefore parties to the lease do not know of their rights and responsibilities,” Mr McKibbin said.
Looking at the most basic obligation of paying “rent”, common industry terms for “rent” include:
(1) Face rent
(2) Base rent;
(3) Current rent;
(4) Effective rent;
(5) GST inclusive rent;
(6) Gross rent;
(7) Turnover rent;
(8) True rent;
(9) Net rent; and
(10)True gross rent.
“A mandatory, standard readable lease will go a long way to solving many of the problems in this important sector of our economy,” Mr McKibbin said
