THE State Government has introduced a bill to amend a number of acts including the Commercial Tenancy (Retail Shops) Agreements Act.
One of the main changes to the act is the drawing down of the unconscionable conduct provisions from the Trade Practices Act into the Retail Shops Act.
However, there may be a flaw in the drafting.
This is because Part IIA of the Retail Shops Act only refers to a ‘retail shop lease’.
The issue is whether this means that this part of the act only applies to leases in existence and not to negotiations for a lease or the renewal of an existing lease (a lease where the renewal is not made pursuant to an option to renew contained in an existing retail shops lease).
If this is correct, the unconscionable conduct provisions of the Trade Practices Act will not apply to a significant portion of negotiations.
It is in these negotiations for leases and renewals where instances of unconscionable conduct are most likely to arise.
Peter Beekink, partner - 9288 6751