Franchise OR LICENCE?

If it looks like a duck, walks like a duck and quacks like a duck, it probably is a duck. The same reasoning can be applied to whether a licence agreement constitutes a franchise agreement – it is a matter of substance over form.

Both licence agreements and franchise agreements can grant people the right to use intellectual property, including trademarks, brands and a business system.
There are differences between the two types of agreement, so if you are thinking of buying into a franchise you need to make sure of your ground. Under the Australian Franchising Code of Conduct, four elements must be met for an agreement to constitute a franchise agreement… 1. there is an agreement, either written, oral or implied 2. one person grants to another person the right to conduct a business offering, supplying or distributing goods or services under a system or marketing plan substantially determined, controlled or suggested by the franchisor 3. the business will be substantially or materially associated with a trademark, advertising or a commercial symbol owned, used or licensed by the franchisor or specified by the franchisor 4. before starting (or continuing) the business, the franchisee must pay or agree to pay the franchisor a fee. The fee can include an initial capital investment, payment for goods or services, or a royalty fee. It excludes payments for goods or services supplied on a genuine wholesale basis or repayment of a loan.

1. there is an agreement, either written, oral or implied 2. one person grants to another person the right to conduct a business offering, supplying or distributing goods or services under a system or marketing plan substantially determined, controlled or suggested by the franchisor 3. the business will be substantially or materially associated with a trademark, advertising or a commercial symbol owned, used or licensed by the franchisor or specified by the franchisor 4. before starting (or continuing) the business, the franchisee must pay or agree to pay the franchisor a fee. The fee can include an initial capital investment, payment for goods or services, or a royalty fee. It excludes payments for goods or services supplied on a genuine wholesale basis or repayment of a loan.

2. one person grants to another person the right to conduct a business offering, supplying or distributing goods or services under a system or marketing plan substantially determined, controlled or suggested by the franchisor 3. the business will be substantially or materially associated with a trademark, advertising or a commercial symbol owned, used or licensed by the franchisor or specified by the franchisor 4. before starting (or continuing) the business, the franchisee must pay or agree to pay the franchisor a fee. The fee can include an initial capital investment, payment for goods or services, or a royalty fee. It excludes payments for goods or services supplied on a genuine wholesale basis or repayment of a loan.

3. the business will be substantially or materially associated with a trademark, advertising or a commercial symbol owned, used or licensed by the franchisor or specified by the franchisor 4. before starting (or continuing) the business, the franchisee must pay or agree to pay the franchisor a fee. The fee can include an initial capital investment, payment for goods or services, or a royalty fee. It excludes payments for goods or services supplied on a genuine wholesale basis or repayment of a loan.

4. before starting (or continuing) the business, the franchisee must pay or agree to pay the franchisor a fee. The fee can include an initial capital investment, payment for goods or services, or a royalty fee. It excludes payments for goods or services supplied on a genuine wholesale basis or repayment of a loan.

All four elements are cumulative – in other words, all elements and all parts of each element must be present before the agreement can be classified as a franchise agreement. It does not matter what the agreement is called. If it meets all four criteria, it will constitute a franchise agreement for the purposes of the code. The main factor distinguishing a licence agreement from a franchise agreement is the degree of control and strict compliance with a business system inherent to franchise agreements. Licence agreements are commonly more relaxed in this regard.

CASE STUDY
The leading case relative to this area was the 2012 Federal Court decision in Rafferty v Madgwicks. In finding that a “rights agreement” was in fact a franchise agreement, the court set out relevant factors that could potentially indicate the existence of a franchise agreement. These included: 1. specific requirements for accounting and record-keeping, signage and merchandising, sales structures and reporting turnover 2. the franchisor’s right to audit account records and to approve marketing material 3. restrictions on the

These included: 1. specific requirements for accounting and record-keeping, signage and merchandising, sales structures and reporting turnover 2. the franchisor’s right to audit account records and to approve marketing material 3. restrictions on the

1. specific requirements for accounting and record-keeping, signage and merchandising, sales structures and reporting turnover 2. the franchisor’s right to audit account records and to approve marketing material 3. restrictions on the

2. the franchisor’s right to audit account records and to approve marketing material 3. restrictions on the

3. restrictions on the franchisee’s sale of competing products or services, use of the brand name and trademarks, and specific marketing or sales territories. For the document to constitute a franchise agreement, the system or marketing plan under the agreement must be substantially determined, controlled or suggested by the franchisor. The degree of control must be carefully considered, along with the extent to which the franchisee’s business involves the sale of the franchisor’s goods or services.

The details of such a system or marketing plan do not need to be set out in the agreement. It will be enough for the business to be proved a franchise if the agreement allows the franchisor to exercise this control.

Just because an agreement is not called or intended to be a franchise agreement, it may nevertheless be caught within the ambit of the code, which is intended to protect franchisees involved in transactions where there is inequality of bargaining power. Therefore it is important to look at the substance of an agreement to determine whether it will be governed by the code. Heavy obligations are placed on both parties under the code, as well as consequences for non-compliance. This makes it essential to always obtain legal advice before entering into commercial agreements to ensure full compliance with the relevant laws.

Need advice about your Franchise Agreement?  Talk to the Franchising team at Rouse Lawyers. Contact us today!

Article was previously published in the July/August edition of Franchise Business Magazine.

Privacy Awareness Week

 

Each year, the Office of the Australian Information Commissioner (OAIC) holds a week of events to promote privacy and encourage best practices by companies and organisations on how they can keep your personal information safe.  Each year has a different theme: This year, the focus of the week is “trust and transparency”.

“This Privacy Awareness Week (PAW) we explore privacy through the theme Trust and Transparency. This speaks to the consumer and community trust that flows to organisations who handle personal information transparently, and with care, throughout the information life cycle.

Personal data can travel through numerous transactions, media and organisations — but it’s always personal — so it’s important that we take care at every step.”

– Timothy Pilgrim, Australian Information Privacy Commissioner

This year, Rouse Lawyers is a proud partner of the Privacy Awareness Week and we are encouraging you to take some time this week to think about how you implement trust and transparency within your organisation.

Achieving Trust and Transparency

Achieving trust and transparency with your staff and customers may seem daunting at first, but by following and implementing a few simple steps, you can be on a path towards achieving this goal.

Implementing a clear Privacy Policy, making that policy easily available on your website and holding regular staff training to encourage positive behaviours towards privacy processes are all examples of ways you can create an environment of trust and transparency.

If you are unsure where to get started, the OIAC website publishes many helpful guides to assist you in being compliant with your privacy obligations (or if you wish to have a more in-depth conversation contact us to discuss any privacy related matter).  One such guide is the Privacy Management Plan; implementing a plan is an excellent way to keep you focussed on creating trust and transparency.

Creating a Privacy Management Plan

STEP 1: EMBED A culture of privacy that enables compliance. Good privacy management stems from good privacy governance. Ensure your leadership and governance arrangements create a culture of privacy that values personal information. – OAIC

Ways to Achieve Step 1:

• Create a Privacy Policy in line with the Privacy Act.  Having a clear and easily accessible Privacy Policy is the first step in building trust with your customers.  When your customers know how you will handle their information safely, they are more likely to engage with your company.
• Include as part of your induction training a module on what is personal information and the steps you take to protect that information.
• Conduct staff training where you discuss when personal information can be disclosed and when it cannot.
• Talk to your staff about risks associated with disclosing personal information.  This will not only assist in protecting personal information you hold but may also prevent a staff member from having their personal information misused.
• Consider any professional or ethical standards that apply to your industry relating to client confidentiality and disclosure of customer information.

STEP 2: ESTABLISH Robust and effective privacy practices, procedures and systems Good privacy management requires the development and implementation of robust and effective practices, procedures and systems.  – OAIC

Ways to Achieve Step 2:

• Conduct regular staff training session where privacy is a focus.   When you discuss privacy compliance with your staff on a regular basis, it is more likely that your staff will implement your privacy processes correctly.
• Create a method on how you will handle privacy concerns raised by your customers.  Does your staff know how to answer customer’s questions?  If your staff is unsure or inadequately trained, your customers may not feel that you are being transparent with how you handle their information.
• Encourage a culture where concerns and complaints are treated seriously.  If your customers feel that you are care about their concerns, they will in turn trust in you with their personal information.
• Start thinking about how you will handle a data breach. Consider developing a written procedure and management plan. New obligations on how you must handle data breaches is set to start in 2018.

STEP 3: EVALUATE Your privacy practices, procedures and systems to ensure continued effectiveness Systematically examine the effectiveness and appropriateness of your privacy practices, procedures and systems to ensure they remain effective and appropriate. – OAIC

Ways to Achieve Step 3:

• Undertake regular audits of your organisation.  Are policies and procedures being implemented correctly?
• Consult periodically with a privacy expert to keep you up-to-date regarding your privacy obligations.
• Evaluate the purpose for collecting any personal information.  Do you require each piece of information?  If not, making the disclosure of that personal information optional is another way to build trust with your customers.

STEP 4: ENHANCE Your response to privacy issues Good privacy management requires you to be proactive, forward thinking and to anticipate future challenges. By continually improving your privacy processes, you will ensure you are responsive to new privacy issues and that implementation will not be a burden. 

Ways to Achieve Step 4:

• Change and adapt your processes and procedures based on the feedback you receive form your staff, customers and internal audits.

We are here to help

Privacy is rarely about secrecy, but is about transparency, security, and choice. It’s about organisations being up-front about their personal information handling practices so that individuals can make informed choices about how they share their information. And it’s about respecting customer trust by maintaining strong security and information handling practices throughout the life cycle of personal data.

Unsure if you are compliant with your obligations concerning personal information or need to create or update your Privacy Policy?  Contact Rouse Lawyers and ask to speak with one of our privacy law experts to discuss how we can assist you with all things concerning privacy law.

Data Security – Show Pony Group Pty Ltd v Black Swallow Boutique Pty Ltd & Ors

Show Pony Group Pty Ltd (“ShowPo”) has settled a dispute with competitor Black Swallow Boutique Pty Ltd (“Black Swallow”) and two individuals, Mr Alexander Baro (chief executive of Black Swallow) and Ms Melissa Aroutunian (a former graphic designer for ShowPo), over the alleged theft of ShowPo’s contact database.

The case highlights the risks of unauthorised use and disclosure of confidential information. It also reveals that sometimes the greatest threat comes from within.

Details of the ShowPo case

ShowPo, a hugely popular online women’s fast fashion retailer, commenced proceedings in the Federal Court of Australia in mid-November 2016. It was alleged that the former employee, Ms Aroutunian, downloaded a copy of  ShowPo’s Client Contact List before leaving ShowPo and provided a copy of that list to Black Swallow. According to court filings, the database contained contact information for all of ShowPo’s customers, competition entrants, suppliers and other contacts. It was estimated that the database contained around 306,000 entries.

ShowPo was successful in obtaining an interim injunction (a temporary court order made subject to the subsequent trial of the proceedings) to prevent the three respondents from using or disclosing the Client Contact List.

The proceedings then headed to Mediation, following which the case was finalised by agreement between the parties.

According to the final orders, dated 24 March and 10 April, each of the respondents is permanently restrained from using or disclosing the Client Contact List, and Black Swallow has been ordered to pay $60,000 in compensation to ShowPo over instalments.

The customers of a business are its lifeblood, and their information is increasingly being obtained and stored online. So, what measures can be taken to protect this essential and sensitive information from unauthorised breach? And what can you do if a breach occurs?

Basic Data Security

It goes without saying that effective password management and data security measures are key steps in protecting any sensitive data.

Ask yourself these questions:

• Do only those employees who need access to the data have access? Do your entry level staff need admin level access? In most cases, not all data needs to be known, accessible or editable by every person in the business. Work with your IT/software provider to restrict unnecessary access.
• Is your data secured on the move and at rest? Use industry standard encryption (eg https) to protect data transactions and ensure your data is encrypted whenever it’s stored.
• Are strong passwords being used? Everyone knows that “Password1234” is not secure. But do your staff or your business use their birthdate, street address, family members’ names or a similar formula to choose a password? Do they change passwords by incrementing a digit at the end? Do they use the same work password for their social media account? Consider training your staff to use a reputable password manager to generate unique passwords for each account or implement mandatory lengths of time when your staff need to change their system passwords.
• Are system passwords being stored securely by staff? Do your staff share passwords with each other? Do they allow others to use their accounts? – Hint: Passwords should not be scribbled on a post-it note and stuck to your computer monitor! If everyone knows Johnny’s password, then everyone can use his account with impunity. Using a reputable password manager can even allow the business to generate secure passwords and grant access to the system without even disclosing the password to the employee.
• When an employee leaves, is their account access immediately suspended and the password reset? Do your staff contracts contain confidentiality provisions, and do you remind them of their obligations post-termination? Even if you part with an employee on good terms, leaving the gate open is never a good idea.
• Does your staff know what to watch out for to avoid falling victim to scam or phising emails?  Consider training your staff on how to identify illegitimate emails by visiting www.scamwatch.gov.au.
• Does your system log user’s access and activities? Do you get automatic alerts if unauthorised access occurs? Server access logs are vital evidence if the worst should happen.
• Are your devices and those used by your staff secure? You wouldn’t leave the house without locking up: Don’t leave your desk (or your smartphone) without doing so! Physical and digital security is critical. Keep all your systems patched with the latest manufacturer and vendor updates.
• Are all your eggs in one basket? Backups, backups and more backups. Ensure they are kept securely too, to guard against deletion, data corruption, and ransomware or cryptoware attacks. Backups also allow you to resume or continue business operations more quickly in the event of a disaster.

In case of emergency…

Knowing what to do if a breach occurs can make the difference between swift recovery and absolute disaster.

• Consider engaging a data security consultant to develop a disaster management plan – you’ll need to manage both your IT and your PR.
• Train your staff to be security conscious and identify and report risky and suspicious behaviour.
• Know how to lock down access to the system to prevent further breach. Continuing to operate on a compromised system can be risky.
• Know how to quickly obtain your evidence and act quickly as soon as you discover a breach. As in the ShowPo case, in some circumstances with quick action it is possible to obtain interim court orders to protect your position before the horse has bolted.

References

Show Pony Group Pty Ltd v Black Swallow Boutique & Ors (Federal Court of Australia, File No. NSD1984/2016) [ https://www.comcourts.gov.au/file/Federal/P/NSD1984/2016/actions ]

If you have concern’s over the security of your client data contact Rouse Lawyers today to discuss how we can assist you.

 

Contracts in a leasing transaction

If you’re a prospective tenant or landlord entering into a leasing transaction then it’s likely that you will be asked to sign a number of different documents. It’s important to understand the differences between each document and how they interact in order to determine which is appropriate for your situation.

1. Offer To Lease

The first document you’ll commonly be asked to sign is an Offer To Lease. This document is normally prepared by a property agent and sets out a few pages of key terms that will form the foundation of the Lease. These terms usually include the property address and size, rent and annual increases, proportion of outgoings, security bond, whether there will be personal guarantees and any sort of incentive or special conditions. Once the Offer To Lease is signed by the parties, the tenant will usually pay a deposit and the landlord will instruct its solicitors to proceed with preparing the formal Lease.

Whether the Offer To Lease is binding will depend on its terms. The document may expressly say that it is not binding, in which case either party can pull out of the negotiations and the deposit will be refunded. In some cases the document may be binding and entitle the landlord to keep the deposit if the tenant has a change of mind, and perhaps further recourse against the tenant.

2. Lease

The Lease is the formal document containing all of the agreed terms and conditions for the transaction. It will become binding once it is signed by both parties. Once the Lease commences, a copy is normally lodged with the Land Titles Office to be registered on the property’s Title. The length of the Lease will determine whether registration is required. In a straightforward leasing transaction, the Lease will usually be the final document to be signed.

3. Agreement For Lease

In some situations, the parties will be required to sign an Agreement For Lease at the same time as signing the Lease. An Agreement For Lease will usually be applicable if there will be a lengthy delay between signing the Lease and the tenant’s occupation of the property commencing, such as when the property is still under construction.

For example, the tenant wishes to lease a shop in a shopping centre which is currently under construction. Because construction is not complete, then the appropriate documents such as the plans for the shop and the centre have not yet been lodged and registered with the Land Titles Registry in order to create legal title to the shop.

By signing the Agreement For Lease, the parties are entering into a validly binding agreement to essentially enter into a Lease once the shop has been constructed and title to the property is created. Once formal title is created, then the landlord will insert the property description into the signed Lease. The Agreement For Lease will usually set out a number of considerations such as:

1. Plans and specifications. Drafts of these will normally be set out along with the landlord’s ability to modify them.

2. Preconditions for construction. The construction would normally be subject to a variety of preconditions such as council approval. If a precondition is not met, then the landlord may have the ability to terminate the Agreement and walk away from the transaction without any claim by the tenant.

3. Timeframes. There will normally be a construction deadline, and if construction is not complete in time, then the parties may have the ability to terminate the Agreement.

4. Fitout requirements or contributions. The Agreement For Lease may state whether the landlord or tenant will be responsible for fitting out the shop, along with fitout specifications and who will own the fitout. The landlord may also be providing a fitout contribution to the tenant.

If a condition of the Agreement For Lease is not fulfilled which leads to its termination, then a legally binding Lease will not come into effect. The landlord is then usually free to lease the property to another tenant.

4. Incentive Deed

If the landlord is providing the tenant a fitout contribution, rent-free period or some other form of incentive to enter into the Lease, then the details may be included within an Incentive Deed. Whilst such incentives can be contained in the Lease or an Agreement For Lease, in some situations a separate Incentive Deed may be appropriate. The main reason for this is normally to maintain confidentiality.

Because a Lease is registered with the Land Titles Office, anyone can carry out a search and obtain a copy of the Lease (for a fee). The landlord may have special arrangements with different tenants and not want other tenants to know about the incentive. An Incentive Deed will not form part of the public record and will often have a confidentiality provision preventing the tenant from disclosing the incentive details to anyone other than the tenant’s legal or financial advisors.

5. Disclosure Statements

If the Lease is a retail Lease, then there will be mandatory disclosure statements to be signed by both the landlord and tenant, as well as the tenant’s legal and financial advisers. It’s vital to ensure the details in these statements are correct. In certain cases the tenant could have the ability to terminate the Lease early, or the tenant may not be released from the terms of the Lease if they were to assign the Lease to a new tenant.

Conclusion

You may find yourself in a situation where you are presented with a combination, or all, of these documents. Always remember that in many cases these documents are legally binding and have serious consequences for non-compliance. It’s always better to err on the side of caution and obtain advice from an experienced leasing lawyer before signing on the dotted line, especially before signing an Offer To Lease.

Need further information about retail shop leases or other aspects of commercial law in Australia? Contact the experts at Rouse Lawyers today.

Mundine/Green Facebook Live Copyright Controversy

In February 2017, the much anticipated Mundine/Green fight took place.  This long-awaited match was expected to be an intense fight between two rivals, however, Australias received more than just one fight when a dispute over copyright emerged between Foxtel, the official broadcaster, and two Facebook users.

It is alleged, that approximately 300,000 people viewed the fight via Facebook’s live-streaming service when the two men streamed the fight through their Facebook accounts.  Foxtel, being the official broadcaster, alleges that the streaming of the fight violates their copyright as they held the exclusive rights to air the fight. Foxtel threatened legal action against the Facebook users.

The unofficial follow-up fight, however, did not last long as the two Facebook users issued public apologies the following week.

So why did the streaming of the fight cause such a disagreement?

Copyright law in Australia

Copyright law has a long history in Australia.  Within the area of intellectual property law, copyright is one of the few rights bestowed automatically.  This means that unlike trade marks or patents, the person or company seeking the legal protection afforded by copyright law does not need to apply or be approved, it simply exists over the published work.

As the rightful owner or creator of the work, you get to decide how and whom may re-publish your work. In the case of Foxtel, the organiser chose Foxtel to exclusively broadcast the fight.  This means that Foxtel was the only entity that had permission to air the fight.  Foxtel argues that streaming the fight is the same as broadcasting and therefore when the two men streamed the fight, they were violating Foxtel’s exclusive rights.

Live-streaming Services

Whether you view Foxtel’s actions as extreme or not, the potential legal issues relating to live-streaming will make headlines again as the service becomes more popular.

While this situation highlights the negative of live-streaming, live-streaming services do offer many benefits for businesses and companies who are looking to build their brand awareness or ‘connect’ with customers in ways that traditional print marketing does provide for.

If you are considering using live-stream services it is important that you understand the terms of service (or the rules) to avoid unnecessary legal issues.

Know your rights

When you sign up to a service that offers live-streaming (e.g. Facebook), there will be terms and conditions that govern how you can use the service including provisions about what you are allowed to stream and what you are not allowed to stream.

With all the major streaming platforms, the terms and conditions do state that you are not to do any action that will infringe another person’s rights including their copyright.   This generally means, you may not re-broadcast something you did not create or have permission to show.

When things go wrong

The consequence of violating a no-infringing clause is that the platform can disable your account and prevent you from using their service again.   Losing access to your social media accounts on either a temporary or permanent basis can have potential negative consequences to the goodwill of your business as you can no longer interact with your customers.

Limiting your risk

So how can you limit your risks when using live-streaming services?  Below are 5 suggestions to assist in reducing your risk:

1. Don’t stream or post what you don’t own

Creating original content is the easiest way to avoid unnecessary legal issues.  Host round-tables, conduct interviews or other activities where you are responsible for creating the content.

When you create the content, you are the owner of the copyright, granting you the rights to broadcast.  You can avoid issues when you are in control.

2. If it’s not yours, it’s not yours

If you didn’t create the content, if you are streaming a TV show, sporting event or concert, there is a chance that you could see legal action brought against you.

Always avoid streaming something you don’t own or have the right to show.

3. Understand the terms and conditions

Regardless if it is your first time live-streaming for your company or you are seasoned pro, it is important to check the rules relating to how you may use the live-streaming service.  The terms of use published by each live-stream service will state how and what you are allowed to stream and what you are not allowed to stream.  Consult these terms to avoid problems following your broadcast.

4. Getting caught in the act isn’t the point

Social media platforms operate on a complaint system.  This means platforms generally will only respond after they receive a complaint, this could be during the stream, the following day or even a month later (depending on how long the video is available).  Simply not being stopped during a live-stream does not mean you will not receive a complaint later.

5. When in doubt, consult a professional

If you are unsure if your marketing plan is up to scratch or simply have questions about using any aspect of social media for your business, seek legal advice.  Here at Rouse Lawyers, we are happy to help at any stage of your plans; from providing advice on a marketing plan or representing you in a copyright infringement, we are here to assist you and your business to reach success.

If you take precaution, you can limit your risks while increasing your customer base.  It’s a win-win for everyone when you follow the rules.

Need further information about this case, or your rights regarding live streaming?  Contact the experts at Rouse Lawyers today on 07 3667 9696

How Do I Protect my ‘Family’ and my ‘Business’ if i get sick?

How Do I Protect my ‘family’ and my ‘business’ from Extra Stress and Expense If (or When!) I Get Sick? 

Although we all feel invincible, everybody faces health problems.

The difficulty is in knowing WHEN or HOW that illness will occur, and how it will impact your family, your finances and your business dealings.

What can you do?

1. Appoint an Attorney for your Business!

WHY?  If you are hospitalized and you can’t make business decisions, your hard work won’t be wasted, an unnecessary delay won’t occur, and critical business decisions can still be made, ensuring your Business continues to work for you, even when you are unwell.

2. Appoint a ‘personal’ Attorney for yourself, so your family can make personal health decisions when you are unable.

WHY?  Losing capacity is awful, disempowering and very stressful on those left behind.  You can make your own life more comfortable, and reduce the stress on your family, if you allow them to make decisions when you can’t.   For example – where and who you live with, your diet and dress, your treatment for physical or mental conditions.

3. Make an Advance Health Directive in case of a medical emergency where you cannot make decisions for yourself.

WHY?  To spell out in detail whilst you can exactly what kinds of medical procedures you do or do not want performed on you – what quality versus quantity of life you desire, particularly if you are in palliative care or in a vegetative state.

Avoid the emotional and financial pitfalls of your survivors arguing amongst themselves as to what you ‘would have’ wanted!

If you do get sick, your family will be grateful that you took the time to prepare for an unfortunate event.

Need advice about estate planning or making a will? Contact the experts at Rouse Lawyers today.

Upcoming changes to NSW retail leasing laws

The NSW Parliament recently passed the Retail Leases Amendment (Review) Bill 2016 (“the Bill”) which has achieved royal assent and is expected to commence shortly. The Bill introduces reforms to the Retail Leases Act 1994 (“the Act”) that governs NSW retail shop leases.

Some of the ways which landlords and tenants will be impacted include:

1. Minimum term

The requirement for a minimum lease term of 5 years will be removed.

2. Registration

Leases with a term of more than 3 years will need to be registered. The lease will need to be lodged within 3 months after it is signed.

3. Disclosure of outgoings

Landlords will have stricter disclosure obligations for outgoings contributions. A tenant will not have to pay an outgoing if it is not disclosed in the landlord’s disclosure statement.

4. Non-retail premises

If a premises is used wholly for non-retail purposes then it will be excluded from the Act. This includes ATMs, vending machines, public telephones, children’s rides, internet booths, private post boxes and certain storage uses.

5. Compensation

If a tenant exercises its right to terminate the lease during the first 6 months due to the landlord’s failure to give a disclosure statement or due to a defective disclosure statement, the tenant can recover compensation from the landlord. This includes the reasonable costs of entering into the lease and fitout costs.

6. Mortgagee consent fees

Tenants will not be liable to pay the costs of the landlord obtaining mortgagee consent to the lease.  

7. Return of bank guarantees

Landlords will be required to return a tenant’s bank guarantee within 2 months after the tenant completes the performance of its obligations under the lease.

8. Jurisdiction of tribunal

The monetary limit on claims for retail disputes arising under the jurisdiction of the Civil and Administrative Tribunal will increase from $400,000 to $750,000.

Conclusion

In what is hoped to increase transparency and reduce red tape for the industry, these changes will bring many NSW leasing requirements in line with other states and territories. Be mindful that each state and territory has its own laws governing retail leases.

Need further information about retail shop leases or other aspects of commercial law in Australia? Contact the experts at Rouse Lawyers today.