Disclosure Statements accompanying your lease


What are Disclosure Statements?

Each state and territory of Australia is regulated differently under retail leasing. Generally, every state requires a Disclosure Statement to be provided by the landlord to the tenant prior to entering into a lease agreement or when renewing a lease. In many states this must be provided at least 7 days before (14 before for ACT) the lease is entered into.  This document is different for each state, however they all outline essential lease information such as:

· The duration of the lease;

· Whether any options for further terms are allowed;

· Rent payable;

· Rent review method;

· Dates the rent review will take place;

· Outgoings;

· Other financial obligations that apply to the lease;

· Tenancy mix;

· Trading hours;

· Information for shopping centre leases;

· Tenant’s fit-out requirements; and

· If there are any relocation or demolition clauses.


It is important that you review these items. You should pay particular attention to any itemised outgoings figures to give you an idea of the additional costs you are required to pay on top of your rent. There are often hidden costs that you should be aware of. You should ask for clarification on costs if you are unsure prior to signing the Disclosure Statement.


When should you obtain the Disclosure Statement?

After you negotiate an agreement on the main terms of the lease you will be provided with a formal letter of offer, often known as the heads of agreement. This document sets out the key commercial terms.

Once this letter is agreed the landlord’s solicitor will issue you with a Disclosure Statement and a draft lease.

If the landlord does not comply with providing the Disclosure Statement within the time required under the legislation of that state then, the tenant is able to terminate the lease within a certain time frame (except for Tasmania). If the landlord provides a Disclosure Statement that is misleading, false or incomplete then the tenant can also take action that may result in the termination of the lease and compensation.

The landlord can also be imposed with a fine if the Disclosure Statement is not provided to the tenant.


What do you do with the Disclosure Statement?

After you have read, understood and agreed to the items noted in the Disclosure Statement you should then sign the document and return it to the landlord.

Some states require you to also sign a Tenant Disclosure Statement which needs to be returned to the landlord otherwise a fine could apply. For example, in NSW failure by a tenant to supply a Disclosure Statement may incur a maximum penalty of $5,500.

Make sure you note all representations made by the landlord or the landlord’s agent if they are not noted on the Disclosure Statement. Be careful as if you do not make a note of these promises, it is much harder to hold the landlord to these promises in the future.


What occurs if the Disclosure Statement figures appear much lower then what you are being charged?

If it can be shown that the landlord made misleading or knowingly false statements in the Disclosure Statement then you should be entitled to reasonable compensation for damage suffered.

In NSW, the tenant is not liable to pay any amount to the landlord in respect of any outgoing unless the liability to pay the amount was disclosed in the disclosure statement. Any estimate of outgoings which was greater than the actual amount will be reduced unless there was a reasonable basis for the estimate provided by the landlord. This does not apply to taxes, rates or levies that came into effect after the disclosure statement was given and was not an outgoing of the lessor when the lessor’s disclosure statement was given.


It is important that you engage a lawyer specialising in Retail Leases to assist you with reviewing your Lease and the Disclosure Statement. They should be able to provide you with assistance to ensure you comply with the relevant laws in your state and to provide you with additional protection and guidance on your lease.


Every lease is different and many contain onerous obligations and hidden costs, which can be avoided with specialist legal advice.

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