Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998 (Tas)

The Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998 (Tas) prescribe a code of practice for retail tenancies in Tasmania. The regulations themselves are short, but they do something important. Regulation 3 prescribes the code set out in Schedule 1, and regulation 4 makes it a penalty provision to contravene or fail to comply with that code.

The regulations take effect on 1 September 1998. The source also records that they were made on 27 July 1998 and notified in the Gazette on 5 August 1998. The legislation entry shows the instrument as current and in force.

For business owners, the practical point is that the code is not optional guidance. It sets rules for retail leasing conduct, timing and documents. The table of contents shows it covers preliminary scope rules, requirements applying to all premises, extra rules for shopping centre premises, dispute resolution and a monitoring committee. The visible clauses then confirm a number of concrete obligations around negotiations, disclosure, lease terms, rent adjustment methods, outgoings, options, market rent review, alterations, compensation and demolition.

The first practical check is whether the premises are retail premises with a lettable area of not more than 1,000 square metres. Clause 2 applies the code to retail premises within that size limit. If the lettable area is more than 1,000 square metres, the code does not apply.

The definition of retail premises is also important. It includes premises used wholly or predominantly for one or more businesses listed in Appendix C, and also premises used for any business in a shopping centre. Because Appendix C is referenced but not fully reproduced here, businesses should check the current legislation directly if they are relying on whether a particular business type is listed there.

The code defines a shopping centre as a group of premises where at least 5 are retail premises, they have or would have a common property owner, they are located in one building or adjoining buildings, and they are generally regarded as a shopping centre.

The term lease is broad. It includes any agreement providing for the occupation of retail premises, whether for a term, periodically or at will. It also includes a licence or other agreement to use the common area of a shopping centre for a term of more than 6 months. That means calling an arrangement a licence does not necessarily keep it outside the code.

The code does not apply to every retail-looking arrangement. Clause 2 lists several exclusions and transitional carve-outs.

It does not apply to a lease of retail premises with a lettable area of more than 1,000 square metres. It also does not apply to a lease or agreement to lease entered into before the commencement of the code, subject to the separate rules that can later bring some older arrangements into scope after variation or option exercise.

It also does not apply to a lease entered into on or after commencement if that lease is entered into in accordance with an agreement to lease made before commencement. There is also an exclusion for some new leases resulting from the exercise of an option in a pre-commencement lease, where the number of times remaining for the option is specified or decreases when exercised, or where the new lease contains no variation other than one already provided for by the original lease.

There are further exclusions for retail premises used wholly or predominantly for a business carried on by a tenant on behalf of the property owner, and for premises within larger venues such as a cinema, bowling alley, skating rink, indoor cricket centre, basketball stadium or netball centre where the business in the retail premises is carried on by the operator of the principal business.

The code matters most at specific trigger points. The first is the start of negotiations. Clause 5 says a property owner is to provide the tenant with a copy of the proposed lease and a copy of the code as early as practicable in the negotiations. It also says a person must not offer to enter into a lease, or invite an offer to enter into a lease, unless a written copy of the proposed lease is available for inspection by a prospective lessee.

The next major trigger point is disclosure. Clause 6 requires the property owner to give the tenant a disclosure statement at least 7 days before the earliest of four events: signing a written lease, signing a written agreement to lease, entering into occupation, or paying rent. This is a practical timing rule. Businesses should count backwards from the earliest event, not just from the intended lease signing date.

Another trigger point is any material change after disclosure. Clause 7 requires the property owner to notify the tenant in writing of any material change to the information in the disclosure statement that occurs after the statement is given but before the lease is signed or the tenant enters possession, whichever is earlier. That notice must be given before that earlier event.

Further trigger points arise during the lease term, especially for rent adjustments, market rent reviews, outgoings requests, option exercises, major alterations, compensation issues and demolition notices.

The visible text supports a number of practical obligations that businesses can act on immediately.

First, clause 3 prohibits conduct that is harsh, unjust or unconscionable. The examples given include a threat by a property owner to subsidise a competitor in nearby premises, or not to renew a lease unless the tenant agrees to a proposal or pays rent above market value rent.

Second, clause 4 requires a disclosure statement, lease or other document to be easily legible, clearly expressed and printed clearly in a minimum print size of 10 point. This is a drafting rule, not just a style preference.

Third, clause 5 says a person must not make a representation in negotiations that the person knows is not accurate, truthful and without omission of any material matter at the time it is made.

Fourth, clause 2 says a written lease is to contain a provision to the effect that the code and the disclosure required by clause 6(1) form part of that lease. Clause 2 also says that, unless otherwise provided, if there is an inconsistency between the code and a lease or agreement to lease, the code prevails.

Fifth, clause 10 requires the lease documents to contain all terms and conditions agreed during lease negotiations. Immediately above the tenant's signature there must be a prescribed warning statement in bold print and minimum 12 point type telling tenants to read all documents closely, obtain independent legal and financial advice, and ensure they have received a disclosure statement at least 7 days before entering the lease.

Sixth, clause 11 requires the property owner to provide the tenant with an executed copy of a written lease as soon as practicable after it is signed by the tenant.

Seventh, clause 8 says each party to a proposed lease is to bear their own lease preparation costs, although the property owner may charge the tenant the cost of alterations the tenant requires to be made to the lease, and written authority for lease preparation may deal with costs if the prospective tenant withdraws from negotiations.

Eighth, clause 9 prohibits key money, subject to the stated exceptions around assignment-related rent review, refurbishment or refitting, or a proposed assignee entering into a new lease.

The code contains detailed machinery for rent adjustment. Clause 12 says that if a lease provides for an adjustment of rent during the lease term, the lease is to state the method by which the rent is to be adjusted on each occasion. The permitted methods listed in the visible text are CPI or another agreed consumer price index, an agreed percentage, current market value rent, an agreed amount, or an agreed formula that does not combine certain listed methods. If a lease provision contravenes the clause, the provision is invalid and the rent is to be determined in accordance with clause 21.

Clause 12 also invalidates some rent adjustment clauses. A clause is invalid if it permits one adjustment by reference to more than one listed method, or reserves a discretion to apply more than one method. Subject to the special rent clause, a provision is also invalid if it allows an adjustment during the first 12 months of the lease or more frequently than once in each 12 month period after the first anniversary. A lease must state the date each adjustment is due, and a clause prohibiting a decrease in rent is invalid.

For market value adjustments, clause 13 says the tenant may request the property owner to state the amount the owner believes is the market value rent. The request must be delivered no less than 4 months and no more than 6 months before the adjustment date. The property owner must then give written notice of the proposed market value rent no less than 3 months before the adjustment date. If the property owner fails to do so, the owner may not seek the adjustment. The tenant then has 21 days after notice to agree, seek negotiation or require determination under clause 21.

The code also deals with turnover rent and special rent. Clause 15 says turnover rent must exclude listed items. A property owner may require turnover figures to be audited, with cost consequences depending on whether the initial information was at least 95% accurate. Clause 16 says special rent may be agreed in writing to cover fitout or fixtures, fittings and equipment installed by the property owner, and any required bank guarantee must not exceed the cost incurred by the property owner under that arrangement.

Clause 17 says that unless otherwise agreed, rent and outgoings are to commence from the date of handing over possession with all finishes provided by the property owner in accordance with the lease.

On outgoings, clause 18 requires the lease to state in detail which outgoings are recoverable, how unforeseen outgoings are generally to be dealt with, the method for calculating the tenant's share, and the time for payment. The code says a tenant is not liable for listed items including capital expenditure, the property owner's contribution to depreciation or a sinking fund, the property owner's contribution to promotion and advertising, interest or charges on money borrowed by the property owner, insurance premium for the property owner's loss of income, and reasonably foreseeable outgoings not specified in the lease. Clause 18 also says a property owner may not recover depreciation from the tenant.

If requested in writing, clause 18 requires a property owner to give a detailed list of estimated recoverable outgoings for the next accounting year at least one month before the start of that year, and a statement showing recoverable outgoings expenditure for a specified period. Clause 19 says that if requested in writing, the property owner is to appoint an auditor to provide a report for the tenant within 3 months of the end of each accounting year, with the visible text setting out what the report must contain and when the tenant pays the audit cost.

For options, clause 20 says a lease that includes an option to renew is to specify the period for which the renewed lease may apply. If the option rent is current market value rent, the tenant may request the proposed rent no less than 4 months and no more than 6 months before the expiry of the option exercise period. The property owner must then give written notice of the proposed rent not less than 3 months before the expiry of that period. The tenant then has 30 days after receiving the notice to exercise at that rent, seek negotiation or require determination under clause 21.

Clause 21 sets out the market rent review framework. Except where a dispute over market value rent is determined under clause 39, the dispute is to be determined by an independent valuation. The visible text sets out how valuers are selected, when the Director of Consumer Affairs and Fair Trading may appoint a valuer, the requirement to apply Appendix A valuation principles, how valuation costs are shared, and how option or renewal dates are deferred while an independent valuation is being carried out.

Clause 2 says Part 3 applies only to a lease of, or an agreement to lease, retail premises within a shopping centre. That is an important scope rule. Businesses outside shopping centres should not assume the Part 3 rules apply to them, and businesses inside shopping centres should not ignore them.

The visible table of contents shows that Part 3 deals with costs of obtaining information, advertising and promotion, relocation, inadequate sales, tenants' association and trading hours. Because the detailed text of those clauses is not fully reproduced here, businesses in shopping centres should check the current code directly before relying on this page for those topics.

The code also includes a dispute resolution Part. The visible text confirms that clause 39 is headed Disputes, and some earlier clauses expressly refer parties to the dispute resolution procedures in Part 4. For example, clause 7 says a property owner may contest a tenant's notice of termination by invoking the dispute resolution procedures set out in Part 4.

There is also a Monitoring Committee established under Part 5. The table of contents shows provisions dealing with the committee's establishment, vacation of office, functions and powers, proceedings and remuneration of members. The definitions clause confirms the committee is the Retail Tenancies Code of Practice Monitoring Committee established under clause 40.

These features matter because the code is not limited to pre-lease paperwork. It also creates an ongoing framework for handling disagreements and monitoring how the code operates.

If you are a tenant, landlord or agent, the safest way to use this regulation is to build a document checklist around the code's trigger points. The source text supports checking the proposed lease, the disclosure statement, any written notice of material changes, the final executed lease, rent review notices, outgoings estimates and reports, and option correspondence.

It is also important to compare conduct with documents. The code regulates representations made in negotiations, requires clarity of documentation, and says the lease documents are to contain all terms and conditions agreed during negotiations. That means side conversations and informal assurances can become risky if they are not reflected properly in the lease pack.

For shopping centre leases, add a separate check for any centre-specific issues such as advertising and promotion, relocation or trading hours, because Part 3 only applies in that setting.

The regulations were made on 27 July 1998 and take effect on 1 September 1998. The source also records Gazette notification on 5 August 1998. The legislation entry shows the instrument as current and in force.

For older leases, the commencement date matters because the code has detailed transitional application rules. A lease entered before 1 September 1998 is not automatically covered, but some older arrangements can still be brought within the code if they are later varied in a way not provided for by the original lease, or if an option is exercised in the circumstances described by clause 2.

Businesses should read this regulation as a practical compliance framework for Tasmanian retail leasing. Start with scope: retail premises, size, shopping centre status, and whether the arrangement is a lease, agreement to lease, sublease or qualifying licence. Then check timing: disclosure, notices, rent review windows and option windows. Then check drafting: whether the lease says what the code requires it to say, and whether any clause is inconsistent with the code.

If you are relying on a point not fully visible in the available text, especially the detailed contents of Appendix B, Appendix C or the later truncated clauses, check the current legislation directly before acting. This page is designed to help you spot the main trigger points and obligations that are clearly supported by the legislation text available here.

This page is based on the current Tasmanian legislation entry for the Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998 and the visible text of the regulations and Schedule 1. The available text clearly supports the commencement date, the penalty provision, the scope rules, the 1,000 square metre limit, the transitional application rules, the 7 day disclosure timing rule, the requirement to provide the proposed lease and the code early in negotiations, and the rule that the code prevails over inconsistent lease terms.

Some parts of the code are only visible by heading or are cut off part-way through. Where that is the case, this page avoids giving a complete summary and instead points readers back to the current legislation for confirmation.