COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 - SECT 12
COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 - SECT 12
12 . Landlord’s operating expenses etc., effect of provisions in lease for payment by tenant of
(1) If provision is
made in a retail shop lease for payment by the tenant, in addition to rent, of
all or any of the operating expenses of the landlord —
(a) the
amount payable by the tenant under the retail shop lease is limited to the
items of operating expenses that the retail shop lease specifies are to be
paid wholly or in part by the tenant and does not include an amount in respect
of which the retail shop lease does not specify both —
(i)
how that amount is to be determined and, when applicable,
apportioned to the tenant; and
(ii)
how and when that amount is to be paid by the tenant;
and
(b)
subject to subsection (1e), the proportion of those operating expenses payable
by the tenant under the retail shop lease shall not be greater than the
relevant proportion without the approval of the Tribunal; and
(c)
where —
(i)
the premises the subject of the retail shop lease are
part of a group of premises; and
(ii)
any part of the operating expenses is expenditure
incurred as a result of some only of the premises in the group being open
outside the standard trading hours,
the retail shop lease
shall be taken to provide that a tenant whose retail shop was not so open is
not required to make any payment of, and the landlord is not entitled to
recover, the expenditure referred to in subparagraph (ii); and
(d) the
retail shop lease shall be taken to provide that —
(i)
the tenant is not required to make any payment of, and
the landlord is not entitled to recover, any such operating expenses in
respect of a year or part of a year until at least one month after the
landlord has given to the tenant annual estimates of expenditure under each
item of operating expenses in respect of the year; and
(ii)
the landlord is required to give to the tenant a written
statement in accordance with subsection (1a) (an operating expenses statement
) that details all expenditure by the landlord in each accounting period of
the landlord during the term of the lease on account of operating expenses to
which the tenant is required to contribute.
(1a) An operating
expenses statement —
(a) is
to be given to the tenant within 3 months after the end of the accounting
period to which it relates; and
(b) if
the relevant retail shop is in a retail shopping centre, must include a
statement of the current total lettable area of the retail shopping centre and
details of any material change in that total lettable area during the period
to which the statement relates; and
(c) is
to be prepared in accordance with relevant principles and disclosure
requirements of the applicable accounting standards made by the Australian
Accounting Standards Board, as in force from time to time; and
(d) may
be a composite statement (that is, it may relate to more than one tenant) if
each tenant to which it relates is able to ascertain from the statement the
information required by subsection (1)(d)(ii) that is relevant to that tenant;
and
(e) is
to be accompanied by a report on the statement prepared by a registered
company auditor within the meaning of the Corporations Act 2001 of the
Commonwealth which includes a statement by the auditor as to whether or not
the operating expenses statement correctly states expenditure by the landlord
during the accounting period concerned in respect of operating expenses to
which the tenant is required to contribute, and as to whether or not the total
amount of estimated operating expenses for that period (as shown in the
estimate of operating expenses given to the tenant) exceeded the total actual
expenditure by the landlord in respect of those operating expenses during that
period.
(1b) The landlord
shall bear half of the cost of an audit referred to in subsection (1a)(e) and
the other half of that cost shall be borne by —
(a) the
tenant to whose premises that audit relates; or
(b) if
there is more than one tenant to whose premises that audit relates, jointly in
the relevant proportions.
(1c) An operating
expenses statement is not required to be accompanied by an auditor’s
report if the statement does not relate to any operating expenses other than
land tax (unless subsection (1g) applies), water, sewerage and drainage
charges, local government rates and charges or insurance premiums and it is
accompanied by copies of assessments, invoices, receipts or other proof of
payment in respect of all expenditure by the landlord referred to in
subsection (1)(d)(ii).
(1d) If a landlord
does not comply with the requirement referred to in subsection (1)(d)(ii), the
tenant is not obliged to pay, and the landlord is not entitled to recover,
operating expenses from the date of that noncompliance until the landlord
complies with that requirement.
(1e) A tenant under a
retail shop lease in respect of a retail shop in a group of premises —
(a) is
not liable to contribute towards an operating expense of the landlord that is
not specifically referable to any particular premises in the group of premises
unless the shop is one of the premises to which the operating expense is
referable; and
(b) is
not liable to contribute an amount in excess of an amount calculated by
multiplying the total amount of that operating expense by the proportion that
the lettable area of the shop bears to the total lettable area of all of the
premises in the group of premises to which the operating expense is referable,
without the approval of the Tribunal.
(1f) If there is a
provision in a retail shop lease in respect of any premises to the effect that
the tenant is obliged to make a payment to or for the benefit of the landlord
for management fees, the landlord is not entitled to recover, and the tenant
is not obliged to make, that payment.
(1g) If provision is
made in a retail shop lease for payment by the tenant of all or any of the
land tax or metropolitan region improvement tax imposed in relation to the
land on which the retail shop is situated it is a term of that retail shop
lease that the tenant shall only be obliged to pay, and the landlord shall
only be able to recover, whether directly or indirectly, from the tenant in
relation to that land —
(a)
where the premises the subject of the retail shop lease comprise the whole of
the land, the notional land tax imposed; and
(b)
where the premises the subject of the retail shop lease do not comprise the
whole of the land, the relevant proportion of the notional land tax imposed.
(2) A provision in a
retail shop lease in respect of premises in a retail shopping centre to the
effect that the tenant is obliged to make a payment to or for the benefit of
the landlord, whether by way of contribution to a sinking fund or otherwise,
for or in respect of the amortisation of all or part of the costs of or
incidental to —
(a) the
construction of the retail shopping centre; or
(b) any
extension of the centre or structural improvement to the centre; or
(c) any
plant or equipment that is or becomes the property of the owner of the retail
shopping centre,
is void.
(3A) A provision in a
retail shop lease to the effect that the tenant is obliged to contribute
towards the cost of any of the landlord’s finishes, fixtures, fittings,
equipment or services is void unless the disclosure statement given to the
tenant under section 6 contains a statement notifying the tenant of the effect
of the provision.
(3) In this section
and section 12A —
group of premises includes a part of a group of
premises;
land tax means tax imposed by the Land Tax Act
2002 ;
metropolitan region improvement tax means
metropolitan region improvement tax under the Planning and Development Act
2005 ;
notional land tax means land tax and metropolitan
region improvement tax calculated on the basis that the land on which the tax
is assessed is the only land of which the landlord is the owner within the
meaning of that term in the Land Tax Assessment Act 2002 ;
operating expenses , in relation to a landlord,
means expenses of the landlord in operating, repairing or maintaining —
(a) a
building of which a retail shop the subject of a retail shop lease to which
the landlord is a party forms the whole or a part; or
(b) if
that retail shop is in a retail shopping centre, the building or buildings of
which a retail shop the subject of a retail shop lease to which the landlord
is a party forms the whole or a part and the common area,
and includes, if contributions are levied under
the Community Titles Act 2018 or the Strata Titles Act 1985 on the landlord,
that part of the contributions that relates to expenses of the landlord in
operating, repairing or maintaining the building or buildings of which the
retail shop forms part or that building or those buildings and the common
area, as the case requires;
referable , in relation to an operating expense
for a retail shop, means the retail shop enjoys or shares the benefit
resulting from the operating expense;
relevant proportion , in relation to a retail shop
that is part of a group of premises, means the proportion that the lettable
area of the retail shop bears to the total lettable area of the group of
premises at the commencement of the accounting year;
standard trading hours means the hours prescribed
for the purposes of subsection (1)(c);
total lettable area , of a group of premises, or
part of a group of premises, means the aggregate of —
(a) the
lettable areas of the premises that are retail shops (or areas set aside for
retail shops); and
(b) if
any of the premises are not retail shops, the lettable area of those premises
defined or calculated in such manner as is prescribed by the regulations.
[Section 12 amended: No. 48 of 1990 s. 9; No. 66
of 1998 s. 8; No. 10 of 2001 s. 220; No. 45 of 2002 s. 10; No. 55 of 2004 s.
121; No. 38 of 2005 s. 15; No. 59 of 2011 s. 10; No. 32 of 2018 s. 195.]