- REINSW argues a standard lease would save businesses legal costs and time
- Comes as JobKeeper ends, which was a lifeline for many retail businesses
- Moreover, streamlined leases would result in less disputes, says REINSW
The Real Estate Institute of NSW (REINSW) has called for a standard retail lease, which they argue is more important now than ever due to the ending of stimulus measures, such as JobKeeper.
According to REINSW, retail leases can take months to settle, often involving a long and costly legal process.
“The overwhelming majority of retail tenants and landlords find themselves at the mercy of unnecessary legal negotiations even though they’ve reached an agreement,” said REINSW CEO Tim McKibbin.
“This means businesses otherwise ready to trade, and landlords requiring income in the form of rent, are made to wait and wait. The end of JobKeeper heightens the urgency of addressing these pointless delays.”
Tim McKibbin, CEO REINSW
Mr McKibbin argues the NSW Government can assist retail businesses, many of who are transitioning to a non-stimulus future, by removing highly complex retail lease agreements which in turn reduces businesses costs.
“It is a typical scenario for tenants and landlords to agree the fundamental terms of a lease, only for their legal representatives to be unable to resolve the peripheral terms. This puts a roadblock in front of an otherwise mutually beneficial relationship.”
“There is an opportunity for Government to prescribe a standardised, broadly applicable, simple to decipher retail lease to help retail tenants and landlords get back to business sooner and more cost-effectively.”
In particular, Mr McKibbin refers to the concept of rent, which has numerous industry terms such as “face rent”, “base rent”, ”gross rent”, ”effective rent”, ”turnover rent” amongst others.
“What’s the point of this?” he adds.
According to the REINSW, a standard retail lease would most likely reduce the chances of disputes due to a better understanding of rights and obligations for both landlords and tenants. For those whose English is not their first language, explanatory documents in their languages can be prepared too.
Additionally, the NSW Civil and Administrative Tribunal wouldn’t be required to labour over disputed clauses, saving money and time for numerous stakeholders.
“Like there is for residential landlords and tenants, the opportunity to streamline retail lease agreements in the interests of retail tenants and landlords has never been more timely.”
Tim McKibbin
