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Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.*
to change the requirements for reporting by lessors of outgoings
expenditure to which lessees are required to contribute to increase the
information required to be included and to ensure that the requirements
accord with accounting and auditing practices,
to change the timing of the required adjustment of lessees'
contributions to outgoings so that the adjustment will be required
within 1 month after the lessor gives the lessee the statement of
outgoings expenditure concerned,
to change the requirements for reporting by lessors of advertising and
promotions expenditure to which lessees are required to contribute so
as to ensure that the requirements accord with accounting and auditing
practices,
* Amended in committee--see table at end of volume.
to amend the provision that entitles a lessee to alternative premises
when the lessee is relocated during the term of the lease so that the
alternative premises need not be offered at the same rent as the lessee's
current premises,
to provide that the costs of mediation under the Act are to be paid by
the parties to the dispute rather than solely by the party applying for
the mediation as at present,
to give the Commercial Tribunal power to award interest on an order
for the payment of money for the period from when the cause of action
arose to the time of the order for payment,
to make it clear that premises in an office tower that is part of a
shopping centre are not to be regarded as retail shops in the shopping
centre,
to make minor amendments to clarify the operation of some
provisions,
to make consequential amendments including the enactment of savings
and transitional provisions.
Clause 2 provides that the proposed Act will commence on a day or days to
be appointed by proclamation.
Clause 3 is a formal provision that gives effect to the Schedule of
amendments to the Retail Leases Act 1994.
Schedule 1
Amendments
Schedule 1 [l] and [2] make minor amendments to the definition of retail
shopping centre in the Act to make it clear that the list of attributes of a retail
shopping centre in the definition all have to be present to constitute a retail
shopping centre.
Schedule 1 [3] provides that premises in an office tower that forms part of a
retail shopping centre are not retail shops for the purposes of the Act.
Schedule 1 [4] replaces the provision dealing with the obligation of a lessor
to report to a lessee on outgoings expenditure by the lessor to which the
lessee is required to contribute. The lessor will be required to provide a
Explanatory note page 2
statement (rather than a report) of Outgoings expenditure. The statement is to
be prepared in accordance with relevant accounting principles and disclosure
requirements (instead of being prepared by an auditor in accordance with
Corporations Law accounting standards) and is to be accompanied by an
auditor's report certifying that the statement is a correct statement of
outgoings expenditure (rather than a statement as to whether the outgoings
are properly payable by the lessee). The amendment brings the provision into
line with current accounting and auditing practices.
Schedule 1 [5] changes the timing of the required adjustment between the
lessor and the lessee to take account of any underpayment or overpayment by
the lessee in respect of outgoings so that it will be required within 1 month
after the lessor gives the lessee the outgoings statement referred to in item [4]
with an upper limit of 4 months after the end of the relevant accounting
period.
Schedule 1 [6] replaces the provision dealing with the obligation of a lessor
to report to a lessee on advertising and promotions expenditure to which the
lessee is required to contribute. The amendment will bring the provision into
line with the provision referred to in item [4] concerning reports to lessees on
outgoings expenditure.
Schedule 1 [7] changes the provision that deals with a lessee's entitlement to
be offered alternative premises when relocated within a shopping centre.
Currently the provision requires the lease for the alternative premises to be on
the same terms (including as to rent) as the lease for the current premises.
The amendment will exclude rent from this requirement to allow the rent to
change to reflect differences in the alternative premises.
Schedule 1 [8] requires the parties to a mediation of a dispute under the Act
to share the costs of mediation. At present the party applying for mediation is
required to pay those costs.
Schedule 1 [9] gives the Commercial Tribunal power when determining a
retail tenancy claim to award interest for the period between the date the
cause of action arose and the date of the Tribunal's order on the claim. The
provision is modelled on the parallel provision applying to the District Court.
Schedule
l [10] is a minor amendment to make references in retail leases to
the Act mean the Retail Leases Act 1994.
Schedule 1 [11] and [13] inserts savings and transitional provisions.
Schedule 1 [12] makes a minor amendment to the Disclosure Statement at
the end of the Act for consistent usage of the expression "gross lettable
Explanatory note page 3