Whether you are the owner of a retail shop or an incoming tenant, it is good to know what is involved in the leasing process so that the owner can get paid rent and the tenant can make income from a thriving business as quickly as possible!
Any proposed lease of a retail shop is governed by the Retail Leases Act 1994 (NSW). A retail shop is defined in the Act and comprises premises used for the carrying on of one or more businesss in a long, prescribed list including butchers, bakeries and barbers!
Before a retail lease can be entered into, the owner (lessor) is required to give the proposed tenant (lessee) the lease and a Retail Tenancy Guide which provides comprehensive information about retail leases. Further, the Act states that a lease cannot be entered into until 7 days after a Lessor’s Disclosure Statement has been given by the lessor to the lessee.
The Lessor’s Disclosure Statement contains important information about the lease such as the term of the lease, any option to renew, the rent, the method of rent review, outgoings and other costs.
After the above steps have been taken, the parties will negotiate the final terms of the lease and, once the terms have been agreed, the lessee will sign the lease and return it the lessor’s solicitor to arrange execution by the lessor.
Shortly after, the lessee will be allowed to enter into possession of the retail shop and both parties can start making money!
Please do not hesitate to ask for assistance with a lease to ensure that the matter proceeds smoothly and as quickly as possible.
March 2024