Helping small businesses with retail leases

BY Australian Retailers Association
06 November 2018

Are you entering into a retail lease?

The Victorian Small Business Commission (VSBC) has launched a new retail leases fact sheet to help support tenants before they enter into a lease. It aims to support retailers to find out what they need to know before they sign to save them time, money and emotional expense. It includes an easy to read checklist to guide you through what you need to understand and look out for.

Over 50% of the small business disputes that come to the VSBC relate to issues between a landlord and the tenant. Quite often it is because the tenant does not understand what they are signing and has not read the fine print. Under law it is the landlord’s responsibility to provide this information before the tenant signs the lease, however the VSBC are finding this is not happening.

There is a fine of up to $8000 for landlords or their commercial agent for failure to provide this information. The VSBC will be monitoring compliance with the Act to ensure tenants are being provided with the retail leases fact sheet and copy of the proposed lease.

To illustrate, the VSBC had a case recently where the landlord lodged an application for mediation seeking unpaid rent. When the tenant was contacted he complained they had not been provided with a disclosure statement or information brochure when entering into the lease. The premises was used as a mechanic shop. The landlord had advised the tenant it was not a retail lease, when clearly a mechanic shop is a retail lease. The tenant did not understand the costs associated with the lease and a dispute could have been averted if he had been provided with all of the information upfront.

The VSBC hope that by developing a fact sheet for retail leases and a checklist for tenants to complete before signing a lease, small business retailers will be better informed and gain the confidence to engage in lease negotiations. A lease is an enforceable and legally binding document, and this makes it important for small business to understand. Hopefully if small businesses are aware of the terms before they sign their lease it will mean they don’t have to come to the VSBC later because of a dispute with the landlord.

You can download the Retail Lease Fact Sheet from the VSBC website:

https://www.vsbc.vic.gov.au/retailleasesbrochure

About The Victorian Small Business Commission

The Victorian Small Business Commission is here for small business. As an independent government agency, we’re here to advocate on issues that affect small business, help you learn about your rights and responsibilities, and help you avoid or resolve any disputes. Whether you’re a small business, or support one, we’re here to assist.

For more information on your rights and responsibilities as a tenant or a landlord you can visit the Victorian Small Business Commission website or call us on 13 VSBC (13 872)

 

 

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ABOUT THE AUTHOR

Australian Retailers Association

Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association representing Australia’s $310 billion sector, which employs more than 1.2 million people. As the retail industry’s peak representative body, the ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.

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