Insights / January 21st, 2020

Retail and Commercial Leasing – Landlords and tenants, the change is finally here!

On 12 December 2019, the Retail and Commercial Leases (Miscellaneous) Amendment Bill 2019 (“the RCLA Amendment Bill”) passed both houses of South Australian Parliament. The RCLA Amendment Bill entails a series of amendments to the Retail and Commercial Leases Act 1995 (“the Act”).

The RCLA Amendment Bill was first introduced on 3 July 2019 proposing significant amendments to the Act (“the July Amendments”).

If you wish to review the July Amendments they are outlined in detail in our previous insights “Retail and Commercial Leasing – is change finally on the way?”.

The purpose of this article is to highlight the additional amendments to the RCLA Amendment Bill that Parliament made in December 2019 (“the December Amendments”).

The RCLA Amendment Bill (including the December Amendments) received royal assent on 19 December 2019 and will take effect on a day to be fixed by proclamation. Accordingly, landlords and tenants should carefully consider the following:

December Amendments

Lease Registration

As outlined in our previous insights “Retail and Commercial Leasing – is change finally on the way?”, there has been uncertainty as to whether a lease can move within or outside the operation of the Act.

The July Amendments clarify this, providing that if the rent payable under a lease exceeds the rental threshold, and the lease is lodged for registration within 3 months after execution, that lease will be considered to fall outside the ambit of the Act. That is the case even if subsequent increases to the rent threshold (or changes to the rental amount) result in the rent being less than the rental threshold.

The December Amendments also require landlords to provide their tenant with written notice of registration within 1 month of registration in order to maintain the above benefits.

Lease Renewals

Similar amendments apply to lease renewals. The July Amendments required the renewal of a lease to be registered within 3 months in order for a lease exceeding the threshold to remain outside the ambit of the Act, despite falling within the threshold at a later date. The December Amendments have reduced this timeframe to 2 months, and also impose a 1 month timeframe within which the landlord must provide their tenant with written notice of registration.

The December Amendments make it imperative for landlords to monitor and comply with the requisite timeframes for registering their lease (or renewal) and providing notification to their tenants if they are to avoid the potential future application of the Act.

If you have any queries regarding the proposed changes set out in the RCLA Amendment Bill, or want to clarify any aspect of the Act please contact a member of our Property team by clicking on the following link – Contact Us.

This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice. You should not act upon the information contained in this publication without obtaining specific professional legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.