Inquiry into market for retail tenancy leases in Australia

• concerns of small businesses about difficulties they encounter when entering into commercial leases ‘over which they have little or no control’
• concerns about difficulties caused in the industry as a whole due to the different laws in the states and territories.

The Commission has been asked to:

• make recommendations to improve the operation of the retail tenancy market in Australia
• identify and quantify the likely costs and benefits of its recommendations for retail tenants, landlords, investors, and the general community.

Terms of reference

The Commission’s terms of reference require it to examine:

1 the structure and function of the retail tenancy market in Australia including:

(a) role of retail tenancies as a source of income for landlords, investors and tenants
(b) relationships with the broader market for retail tenancies

2 competitive, regulatory and access constraints on the market
3 any disparity in information available to landlords and retail tenants
4 scope of reform of retail tenancy regulation including:

(a) differences between the States and Territories
(b) extent of nationally agreed regulation and approaches
(c) extent, adequacy and differences in dispute resolution systems for landlords and retail tenants between the States and Territories

5 the appropriateness and transparency of:
(a) main factors influencing the level of rents
(b) provisions in retail leases establishing the rights of landlords and tenants when leases end

6 measures to improve overall transparency and competitiveness of the retail tenancy leases market

Timeframe

The Inquiry is scheduled to be completed by 21 December 2007 with the Commission to prepare a report. The Commissions’ report will then be considered by Government who may choose to accept some or all of the Commissions’ recommendations. Depending on the Government’s position, legislative changes may then be made to the various laws across Australia which govern retail tenancies.

Submissions

The Commission will soon call for expressions of interest and invite interested parties to put in a written submission.

Thomson Playford Cutlers works with franchisors as a strategic partner to improve overall network performance. We manage compliance issues and address the legal considerations that contribute to franchise network efficiency, profitability and expansion.