Commercial tenancy law review consultation paper
Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) Statutory Review 2022 is currently underway. More information is available on Commercial Tenancy law review .
The CT Act regulates leasing agreements (or leases) between landlords and tenants to provide fair leasing arrangements and low cost dispute resolution mechanisms to deal with issues involving a retail shop lease. The CT Act primarily focuses on the need for transparency of information between landlords and tenants (the parties) and fairness of contracts.
Some of the key CT Act provisions include:
- Disclosure requirements: landlords must provide a tenant with a disclosure statement (a document containing key information on the lease) 7 days prior to entering the lease. The tenant has the right to terminate the lease or to compensation in certain circumstances if disclosure is not provided.
- A right to a minimum 5 year lease term for leases longer than six months.
- Prohibiting lease provisions requiring that a retail shop open during certain hours.
- Regulating lease provisions on rent reviews and relocation.
- Prohibiting unconscionable and/or misleading and deceptive conduct.
- Provisions to assist parties to mediate and resolve disputes through the Small Business Commissioner and the State Administrative Tribunal (SAT) with broad powers for the SAT to make a range of orders.
As a part of this review, stakeholders were being asked to consider the following key issues:
Leases covered by the Act: whether the CT Act still applies to those leases and small businesses to which it was intended to apply.
- Have some retail tenants been inadvertently captured by the CT Act that should be excluded?
- Are there some small businesses that aren’t currently protected by the CT Act that should be?
Minimum five year lease: whether policy settings underpinning the minimum five year term are appropriate for current and future retail shop marketplaces.
- Is greater flexibility needed?
- Is the industry adequately informed of the various options for waiving the statutory five year term?
Disclosure requirements: whether current disclosure requirements are sufficient.
- Should the CT Act require additional information to be disclosed?
- Could existing disclosures be made clearer?
Lease costs: whether the various costs incurred by tenants as part of their lease agreement are fair and reasonable and have costs been adequately disclosed to the tenant.
- Whether the rules relating to lease costs are clear and fair,
- If there is a need to regulate bonds.
First right of refusal: whether the current policy settings in relation to lease renewal or extension are appropriate and provide a balance between the expectations of retail shop tenants and landlords.
- Should an existing tenant have a preferential right to a new lease / extend the current lease for the same premises located in the retail shopping centre?
Early termination due to severe financial hardship: whether the CT Act provides adequate protections for commercial tenants facing severe financial hardship.
- Should the CT Act include hardship provisions that allow temporary adjustments to be made to the lease agreement and/or early termination of the lease in certain limited circumstances?
Trading hours: whether the CT Act’s current settings in relation to trading hours remain appropriate for the current and future retail shops marketplace.
- Should the CT Act be amended to allow a retail shop lease to require a tenant to trade for the core trading hours of the shopping centre or other specified hours?
- Should the standard trading hours be changed to mirror retail trading hours?
Unconscionable conduct: whether the unconscionable conduct provisions within the CT Act are operating as intended to protect parties from behaviour that is unconscionable.
- Should the CT Act be amended to introduce a prohibition on unfair practices?
- Should the CT Act be amended to provide for a wider range of conduct to be defined as unconscionable or broaden the list of factors the SAT can consider in assessing whether conduct is unconscionable?
Dispute resolution: whether the dispute resolution mechanisms within the CT Act are efficient, effective and user friendly.
- Should the CT Act be amended to include or remove matters of dispute that may proceed directly to the SAT without prior alternative dispute resolution?
- Does the current list prescribed in regulation 10 of the CT Regulations require amendment?
- Are the current SAT powers appropriate and working as intended?
COVID-19 and other issues: whether there are any issues resulting from the COVID-19 pandemic or any other issues not identified in the consultation paper that should be considered as part of the review.
Stakeholders were invited to tell us what they think about these issues, or about any other experiences that they have had with the CT Act that might help us to understand how the laws are working and whether they can be improved.
Enquiries can be made by calling Consumer Protection Advice Line on 1300 30 40 54 or by email.
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