Retail Lease vs Commercial Lease

A retail lease is usually granted for premises where the permitted use of the premises is predominantly for retail or if the lease is a type of lease defined under the Retails Shops Act (WA) as a retail lease.

In Western Australia Retail leases are regulated by the Retail Leases Act (WA) “the Act”). In comparison to a commercial lease, the Act provided protections and rights to the tenant that may otherwise not be available in a commercial lease; including but not limited to:-

• Mandatory disclosure requirements. The Act imposes an obligation on the Landlord to provide the tenant with a Disclosure Statement (and continuous disclosure) in relation to the rented premises. The disclosure statement confirms to the tenant the premises being rented, what is included, incidentals such as allocated car parking and an estimate of outgoings associated with the lease. Failing to properly disclosure will allow the tenant to terminate, within a certain period of time.
• Restriction on attempts to claim/recover certain expenses. The Act prevents a landlord from recovering from the tenant expenses such as land tax, and capital improvements undertaken or capital costs incurred by the landlord or the cost of drafting of the Lease or any extensions; and
• Rent Review: The Act prevents hatchet clauses; that is where the landlord may rely on multiple formulas of rent review but only to choose the review that has the higher increase of rent. Only one form of rent review can be applied.

Please note each State and Territory has its lease related legislation. This is intended for Western Australia residents. We are able to advise on interstate leases.