Retail leases under review in NSW

The appointment of a “retail advocate” with the power to investigate and prosecute landlords on behalf of tenants is among several options canvassed in a new discussion paper released by the NSW Government yesterday.

The release of the paper, launched by NSW Small Business Minister Joe Tripodi yesterday, suggests the NSW Government does not expect to find favour with the findings of a Productivity Commission review into retail tenancies that is due for release soon.

Retail tenants’ groups were unhappy with a draft report issued by the Productivity Commission late last year that suggested that further regulation of the leases was unnecessary. The NSW Government appears to have some sympathy with retail tenants.

“The Productivity Commission released a draft report on The Market for Retail Tenancy Leases in Australia in late 2007,” the NSW discussion paper says. “In this report, the Productivity Commission recommends the progressive unwinding of retail tenancy legislation on the basis that the industry is over-regulated and its efficiency may thereby be impeded.

“However, the NSW Government considers the legislation necessary to provide a clear framework for the conduct of parties to retail leasing matters and in limiting the number of disputes that arise.”

One change suggested in the paper is the appointment of a government-funded retail advocate to represent the interests of tenants.

The powers of the advocate could include being able to:

• Prosecute retail leasing breaches in certain circumstances.
• Examine the marketplace, identify any concerns with the retail leasing industry and make recommendations to the minister on the functioning of the act.
• Standing and funding to run test litigation where necessary.

The paper also contains a wide range of further suggestions for possible changes, such as:

• Mandatory education for retail tenants.
• Extending the time period for bringing pre-lease misrepresentation claims.
• Remedies for non-disclosure or incomplete disclosure.
• The provision of disclosure statements when an agreement to lease has been entered into.
• Whether changes are required to the monetary jurisdictional limit of the Administrative Decisions Tribunal.

Submissions may be made to the NSW Department of State and Regional Development in response to the discussion until 26 May 2008.