Retail landlords and property managers take note that with effect from 1 December 2022, there are prescribed changes to the following disclosure statements. These have been made to rectify inconsistences between the prescribed disclosure statements and the 2020 amendments to the Retail Leases Act 2003 (the Act):
- Landlord’s disclosure statement – Retail premises not located in retail shopping centres
- Landlord’s disclosure statement – Retail premises located in retail shopping centres
- Landlord’s disclosure statement on renewal of lease
No doubt the most significant changes introduced by the Act (and now the prescribed changes) are in respect of a retail landlord’s disclosure on renewal of a lease as a landlord must disclose details of any “changes” since the previous disclosure statement was provided (in the majority of cases, the disclosure statement to be dissected in order to identify such changes is 5 or more years old so much of the information has “changed”).
In practice, it would be more efficient for a landlord to simply serve a fresh disclosure statement, but this would be a technical breach of the Act which requires the disclosure statement on a renewal to be “in the form prescribed by the regulations”.
This new requirement is fraught with danger as missing one “change” could threaten the validity of the disclosure statement. An invalid disclosure statement exposes a landlord to drastic consequences as the lease may be terminated or the tenant may be entitled to withhold rent.
It is critical for retail landlords and property managers to update their precedents (if not already done) and seek legal advice if unsure about which “changes” are required to be disclosed on a renewal of lease.
