New South Wales Consolidated Acts New South Wales Consolidated Acts(Sections 11 and 11A)
Advice to lessees1 Before signing agreements to a lease or leases, lessees should ensure they fully understand the documents.2 If there is any doubt, lessees should seek independent legal advice.Note: If there is insufficient space on this form please attach additional sheets and appropriate documents.
Shop and lease details Address of shop/shop No:
Permitted use of shop:
Lease period (see note 1): [date] to [date]
Lettable area (sq m) (see note 2):
Options to renew:□ No□ Yes
Option periods: [date] to [date]
Lessor’s requirements as to quality and standard of fittings in shop (see note 3).
Finishes, fixtures, fittings, equipment and services to be provided by the lessor.
Lessee has to pay for the finishes, fixtures, fittings, equipment and services to be provided by the lessor:□ No□ Yes
If yes, to what extent:
Finishes, fixtures, fittings, equipment and services to be provided by the lessee.
Hours of access to shop outside trading hours:
Date on which shop will be available for occupation by the lessee:
Rent:
Method or formula for calculating rent:
Commencement date: [date]
Rent reviews:
Frequency:
Nature:
Details of any current legal proceedings in relation to the lawful use of the premises/centre:
Outgoings to be paid by the lesseeDetails of outgoings Estimate p.a.Services to the public Car parking
Child minding
Public address/music
Security
Signs
Telephones (public)
UniformsAdministration costs Audit fees
Management fees (administration cost to run centre)
Management fees (paid to management company)Waste management costs Sewage disposal and sullage
Waste disposal and removalCosts to run centre Air conditioning/ventilation
Building intelligence and emergency systems
Cleaning (consumables)
Cleaning (other)
Electricity
Energy management systems
Fire protection
Gardening
Gas and oil
Insurance
Lifts and escalators
Pest control
Repairs and maintenance
Sinking fund for repairs and maintenance
Strata leviesGovernment charges Land tax
Local government rates and charges
Water, sewerage and drainage rates and chargesOthers (specify) TOTAL
Formula for apportionment of outgoings if the lessee is not liable for the total amount:
Additional outgoings to be borne by lessee
Details as to interest of lessor Is the lessor:
□ Owner of the shopor□ Lessee of the shop
Give details of any rights and obligations of lessor under that lease that may affect the shop:
Details as to agreements or representations Give details of any other agreements between lessor and lessee, or representations made by lessor or lessee including those relating to exclusivity or limitations on competing uses:
Details of any anticipated disturbance to trading Give details of any disturbance likely to occur during the term of the lease, where known, where this will have a significant adverse effect on trading:
Section 34 (3) of the Retail Leases Act 1994 may limit a lessee’s claim for compensation if an event disturbing a lessee’s trade was brought to the attention of the lessee in writing, before the lease was entered into. A general written statement made to the lessee before the lease is entered into will not be enough to limit liability of the lessor. A statement must specifically describe the nature of the disturbance, include an assessment of the likelihood of the disturbance taking place (including an indication of the basis on which the assessment was reached) and have regard to its timing, duration and effect during the lease term. Lessees should have to be aware that it is not always possible to predict the timing and the duration of disturbances with certainty.
Retail shopping centre details Name of retail shopping centre:
Address of retail shopping centre:
[Suburb/Town][Postcode]
Number of retail shops in retail shopping centre:
Gross lettable area (sq m):
Parking facilities at retail shopping centre:
Number of bays available for customers:
Number of bays reserved for lessee:
Facilities and services provided by the lessor:
Annual turnover of the retail shopping centre (to the extent collected by the lessor) for the previous accounting period (see note 4):
Annual turnover for specialty shops, on a per square metre basis, for the previous accounting period. Minimum aggregation is to be on the basis of three types of categories (to the extent collected by the lessor) (see note 5):foodnon-foodservicesExpiry date [month/year] of the leases of retailers with a lettable area more than 1,000 square metres:
Total centre traffic count (where available) for the previous accounting period:
Cost of (or basis or formula for) lessor’s works to prepare premises for fit-out (see note 6):
Changes or developments planned by the lessor for:
Retail shopping centre□ No□ YesAttach details
Surrounding roads□ No□ YesAttach details
Core trading hours (the times when retail shops in the shopping centre are required to be open for business):
Tenant mix (attach floor plan showing existing and proposed tenancy mix of the precinct and the location of common areas and kiosks within the precinct).
This arrangement applies as at the date of this statement but may be changed from time to time, subject to agreements or representations details of which are given in this disclosure statement.
Is the lessor able to assure the lessee that the current tenant mix as shown on the attached floor plan will not be altered through the introduction of a competitor or any other type of tenant□ No□ Yes
Tenant/Merchant Association□ No□ Yes
Attach details of constitution, voting rights, contributions
Contribution to retail shopping centre advertising and promotion
□ No□ Yes
Lessee’s contribution $per annumNote: Section 16 of the Retail Leases Act 1994 provides for a minimum term of 5 years for a retail shop lease. The 5 year term can be made up of an initial term and any combination of options. If the parties to the lease agree to a term of less than 5 years, the lessee must provide the lessor with a certificate from the lessee’s solicitor or conveyancer indicating that:(a) the lessee’s rights under section 16 have been explained to them, and(b) the lessee has made an informed decision to accept a term of less than 5 years.Making an informed decision about the viability of a retail business with a less than 5 year term should form part of the lease negotiation. A pro forma section 16 certificate is available for download from www.retailtenancy.nsw.gov.au. It can be provided to the lessor within 6 months of entering into the lease. Without a section 16 certificate, the lessee has the choice of extending the term of the lease to 5 years.Note: Required only for shops in shopping centres or if the rent and/or outgoings is calculated on a “per square metre basis”.Note: If the lessor requires a particular standard of construction for fit-out, the lessee is to be provided with a fit-out guide, setting out this information, with this disclosure statement.Note: The lessor is not liable for a claim under Division 2 of Part 7A of the Act for misrepresentation for any error in the annual turnover of the retail shopping centre if the error is the result of inaccurate information provided to the lessor by the lessee(s).Note: This breakdown is not to identify an individual lessee. For example, if there are only one or two food lessees in a centre, the food category would be excluded from disclosure, or incorporated in non-food or services and noted. The lessor is not liable for a claim of misrepresentation under Division 2 of Part 7A of the Act for any error if this error is the result of inaccurate information provided to the lessor by the lessee(s).Note: Lessor’s works are the works which must be done by the lessor’s trade contractors or employees prior to the commencement of the fit-out by the lessee. The cost of lessor’s works is to be agreed before works are carried out and if actual cost exceeds the agreed cost, the lessee is not liable to bear the difference.
Appendix to Part 1 of Schedule 2Information for the lessee to consider when entering into a retail shop lease Before signing a lease:
You should have detailed discussions with the lessor/agent and also seek advice from business associations, your solicitor and your accountant. Also consult your local Council about any regulations, permitted use or development applications affecting the shop.
Information on these topics is included in the retail tenancy guide.
Ensure that all agreements arrived at with the lessor are included in the lease. Documentation is critical to avoiding and managing disputes about the lease.Rent-be clear about the following issues: What the starting rent is, and on what basis it is calculated.
How the rent will increase during the lease.
If you have agreed to pay turnover rent, be clear as to how you will give this information to the lessor.
If there is an option as part of the lease, find the clauses of the lease that tell you how and when you must exercise the option and that explain how the rent will be set.Lease establishment-check: That you have read the lease and asked for advice on what it means.
That the description of the premises in the lease is accurate and covers any rights you will have to use common areas or car parking for you, your staff or visitors.
Whether statements you have relied on in agreeing to the lease have been documented in the Lessee’s Disclosure Statement, so as to avoid disagreements later.
Whether you need to provide a security bond or personal guarantee to secure the lease, and how much this will be. If a cash security bond is agreed to, be sure it is lodged under the NSW Government’s retail bond scheme.
What expenses you will have to meet to fit-out the shop ready for trading, and whether you will have to meet any of the costs incurred by the lessor in preparing the shop for you to occupy it.The premises-you will need to be sure that: The location and building suit the proposed use you will make of the leased premises and to check whether you will have to renovate to enable the shop to operate.
The hours you can access the shop and open it to trade, as allowed by the lessor and the Council, will be sufficient to allow you to trade profitably.
You have, or can readily obtain, all the permits and licences required to operate the type of business you have chosen, and that the Council’s zoning for the premises does not restrict you from operating this type of business.
You have a condition report or photos to document the state of the premises when taking possession, to prevent or address disputes at the end of the lease. Agreements about equipment should also be documented.Outgoings and expenses-you need to understand: The extra expenses you will have to meet as outgoings, and how they may change over the term of the lease. These are set out in the Lessor’s Disclosure Statement.
The information that the lessor will provide and your rights to receive estimates to allow you to plan for these expenses.
The insurance costs you will have to meet, including any contribution to the lessor’s insurance.When you want to sell the business If you want to sell your business, you need to be aware of the process set out in the Retail Leases Act 1994 for assigning the lease. The lessee becomes the assignor of the lease, and the potential new lessee becomes the assignee. In brief, these are the steps:1 Get an updated copy of the lessor’s disclosure statement. If an updated disclosure statement has not been issued during the term of your lease, request one in writing from the lessor. If it is not provided within 14 days, provide the latest version of the disclosure statement you have to the assignee (or if none exists, this requirement does not apply to you).2 Give a copy of the assignor’s disclosure statement to the assignee (and to the lessor at least 7 clear days before the assignment if you want to be protected from on-going liability under the lease).3 Gather, from the assignee, the following information to provide to the lessor:(a) The assignee’s name and contact details.(b) Documentation to indicate the assignee’s financial standing.(c) Business experience of the assignee.(d) Written records of statements made by the assignor or lessor which influenced the assignee in deciding to enter the assignment.4 Provide information in point 3 to the lessor in writing, by:(a) delivering it personally, or(b) leaving it at or posting it to the last known residential or business address of the lessor,or in any other manner referred to in section 81A of the Act.5 The lessor must respond to the request for assignment of the lease within 28 days from the time all the required information is received, or the assignment is deemed to have taken place.6 The reasons the lessor can refuse a request for assignment of a lease are:(a) If the use of the premises is to change.(b) If the assignee (new lessee) has inadequate retail skills compared to the assignor (current lessee).(c) If the assignee has inferior financial resources to the proposed assignor.(d) If the lessee has not complied with the procedure for obtaining consent to the assignment, as set out in section 41 of the Act.(e) It the shop is in airside premises at Sydney (Kingsford-Smith) Airport and the lessor exercises the right to withhold consent to the assignment under section 80E of the Act.General Check with your accountant the most tax effective way to structure the payment of rent, fit-out costs and GST.
Make sure that all negotiated agreements are written into the lease.
Inspect the property and take notes and photographs prior to moving in.
Section 11A of the Retail Leases Act 1994 requires a lessee’s disclosure statement to be provided to the lessor within 7 days (or any agreed further period) of the lessee receiving the lessor’s disclosure statement. The lessee may be liable to a penalty for an offence under that Act if the lessee’s disclosure statement is not provided.
Advice to the lessor1 The lessee acknowledges that the attached Part 1, Lessor’s Disclosure Statement, was received from the lessor prior to entering into the lease.2 The lessor has made available to the lessee a copy of the proposed retail shop lease and a copy of a retail tenancy guide as prescribed by or identified in the regulations.3 The lessee has sought/not sought independent advice in respect of the commercial terms contained in the Lessor’s Disclosure Statement and the obligations contained in the proposed retail shop lease.4 The lessee believes that the lessee will be able to fulfil the obligations contained in the lease, including the payment of the proposed rent, outgoings and other amounts, based on the lessee’s own business projections for the business.5 In entering into the retail shop lease, the lessee has relied on the following statements or representations made by the lessor or the lessor’s agents:Note: Matters such as agreements or representations relating to exclusivity or limitations on competing uses, sales or customer traffic should be detailed.6 Apart from the statements or representations set out above, no other promises, representations, warranties or undertakings (other than those contained in the lease) have been made by the lessor to the lessee in respect of the premises or the business to be carried out on the premises.Should more space be required please detail on another page.
Signed by or for and on behalf of the lessee:
Date: