“A Coat of Paint for Retail Leases Law in Queensland?”
By Paul Petersen. Paul Petersen is a Senior Associate with Griffiths Parry Lawyers.
Retail leases are effectively a contract that governs the relationship between a landlord and tenant. In Queensland, the most relevant legislation concerned with retail leases is the Retail Shop Leases Act 1994 (“Act”). If you are a tenant who has formed a view that the terms of your retail lease are unbalanced and favour your landlord then you might be surprised to learn that the Australian Government’s Productivity Commission does not seem to share your perspective.
The Productivity Commission’s draft Report was released on 13th December 2007. The Productivity Commission was charged on 19th June 2007 by the then Federal Treasurer, Peter Costello, with carrying out a six-month enquiry into the market for retail tenancy leases in Australia. Part of the ambit of the Report was for the Productivity Commission to consider whether reform, at the Federal or State level, was required together with the appropriateness and transparency of the factors taken into account when determining rents and the lease provisions that determine the parties’ rights when a retail lease ends.
The draft Report serves to highlight the need for both landlords and tenants to seek the appropriate legal advice prior to entry into a retail lease. For tenants particularly, the draft Report sends a clear message that overall the reform of retail shop leases in Queensland, through the Act, are working fairly smoothly. The Productivity Commission has indicated that although there may be some scope for revision of the Act and the operation of the retail leasing market it seems that any legislative amendment will not be substantive and will be aimed more at improving (as opposed to replacing) the existing transparency, disclosure and dispute resolution provisions set out in the Act. The Productivity Commission has also flagged that its final Report willalso consider a greater harmonisation of the Act so that it operates more seamlessly within a federally consistent retail and commercial lease framework to promote greater efficiencies.
From the writer’s perspective, while the Act prescribes certain protection mechanisms for a tenant e.g. in the form of Lessor Disclosure Statements and mechanisms for calculating rent reviews, those mechanisms do not necessarily protect a tenant from being asked to execute a lease that includes other potentially onerous obligations. Perhaps a more important issue here is that of bargaining leverage i.e. will a tenant accept a lease that does not advance its interests due to the lack of retail stock available? The writer has acted for tenants in such a position where although potentially harsh terms were disclosed to it through a review of the lease and the Lessor Disclosure Statement, there was little scope for challenging those terms. The lack of bargaining leverage coupled with a continually tight retail leasing market across the Sunshine Coast means that it is likely that the final outcome of the Productivity Commission’s Review will not advance the interests of certain tenants who should arguably receive greater legislative protection.
In summary, the Act may receive a coat of paint rather than a renovation and given the nature of the submissions received by the Productivity Commission then a coat of paint is perhaps all that is required.
The Productivity Commission plans to hold public hearings in February 2008 in, among other cities, Brisbane. Participants in the form of submissions on the draft Report and observers are welcome and further information and a copy of the draft report can be obtained from the Productivity Commission’s website, www.pc.gov.au.
LAND TAX IN QUEENSLAND
Are you currently paying land tax or nearing the threshold?
What are the thresholds
If the value of your share in all land held in Queensland exceeds:
- for individuals $599,999 and
- for companies, trusts and absentees $349,999
you may be liable to pay land tax.
Facts to consider
Changes in your land valuation may affect your land tax liability. These handy land tax facts will keep you up-to-date on valuations.
- Land tax is calculated on the value of an owner’s aggregated land holdings as at 30 June each year.
- The unimproved valuations of land are determined and issued by the Department of Natural Resources and Water. You can find your value on your rates notice.
- For land tax purposes, this unimproved valuation is subject to an averaging process using the current valuation and valuations for the land for the previous two years.
- If the land does not have unimproved values for the previous two years, the land tax values may also be subject to the application of a State-wide averaging factor.
- Where there are significant increases in unimproved values, the increase may also be capped at 50% of the previous value.
Remember land tax is calculated on your share of the land.
