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Lessors & Lessees beware – Short Term Retail Leases (NSW)

Both Lessors and Lessees need to be aware that the Retail Leases Act 1994 (as amended) provides that any Retail Lease entered into shall be for a minimum term of Five (5) years UNLESS a lawyer not acting for the Lessor certifies in writing before or within six (6) months after the Lease was entered into that:

  • the Lessee has requested the Lawyer to give the certificate
  • the Lawyer has explained to the Lessee the effect of S.16 of the Act and that by giving the certificate, S.16 will not apply.(section 16 states that the minimum term of a Retail Lease is 5 years)

In the event that the Lessor or Lessee enters into a Lease for a shorter period than five (5) years and there is no certificate by the Lessee’s Solicitor, the Lease remains valid and binding between the parties but the term of the Lease is extended to five (5) years.

Options are included and therefore, for example, a Lease for three (3) years with one option to renew for a further two (2) years will comply with the Act.

The non-compliance with that section of the Act may have a disastrous effect on either:

  • The Lessor –  if the Lessor was intending to use the premises himself after  1,2,3 or 4 years
  • The Lessee – if the Lessee was going to relocate to more convenient premises after 1,2,3 or 4 years

Please contact our Property and Commercial Department should you have any leasing enquiries or wish to discuss any leasing issues on 1800 621 071, email or complete our online enquiry form.

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Attwood Marshall

Attwood Marshall