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Any number of pointless delays could be avoided if New South Wales was to introduce a standard retail lease, according to the Real Estate Institute of New South Wales (REINSW).
In a submission to the Office of the NSW Small Business Commissioner, the institute proposed that the introduction of a standard retail lease would be a “natural evolution” of the Retail Leases Act 1994.
REINSW CEO Tim McKibbin said that the majority of landlords and retail tenants are often subject to unnecessary legal negotiations as the law currently stands, even where an agreement has already been reached.
He said it means businesses that are ready to trade and landlords who need income from rent are left to wait.
“It’s typical for landlords and retail tenants to agree to the fundamental terms of the lease, only for their legal representatives to be unable to resolve the peripheral terms. This is a roadblock to an otherwise mutually beneficial relationship,” the CEO explained.
Ultimately, a government-prescribed retail lease agreement will “help landlords and retail tenants avoid waiting months for leases to emerge from an unnecessarily long and costly legal process”.
“Just as a standard residential lease, once signed, enables the tenants to move into a property quickly, a standard retail lease will allow retail tenants to get to work in a more timely manner,” according to Mr McKibbin.
The CEO has also touted how a standard retail lease would enable an easier pathway towards dispute resolution, as there would be no need for the NSW Civil and Administrative Tribunal to labour over the precise interpretation and application of disputed clauses.
An added benefit would be the better understanding of the rights and obligations of landlords and retail tenants, he continued.
Following the end of JobKeeper, and the state’s path out of the pandemic, Mr McKibbin believes that landlords and retail tenants have a more urgent need for efficient processes to usher them back into the market, instead of “pointless delays” that would cost them time and money.
“There’s an opportunity for the NSW government to prescribe a standardised, broadly applicable and simple-to-decipher retail lease, and the opportunity to do this has never been more timely,” he concluded.
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