What Is A Lease Disclosure Statement?
A Lease Disclosure Statement is a document used when entering into or renewing a lease for the purpose of noting important details about the property or agreement. In retail Lease Disclosure Statements, signatures acknowledging receipt and understanding of the document are required by both parties; landlords (lessors) and tenants (lessees). As the disclosure statement is considered part of the legally binding agreement between lessors and lessees, it is essential that both parties obtain legal and financial advice prior to signing.
Lessors are required to issue their disclosure statement to the lessee a minimum of seven days prior to the commencement of the lease. Following this, and within seven days unless agreed otherwise, the lessee is then required to complete their disclosure statement and return it to the lessor.
The Retail Lease Disclosure Statement form, as per the Retail Lease Act 1994 (NSW), can be found here.
What Information Is Included In A Disclosure Statement?
The lessor’s disclosure statement includes information such as:
- Details regarding the owner, property, terms and permitted use
- Insurance details
- Rent and rent review method
- Maintenance and tenant obligations
- Outgoings and predicted expenses
- Works, fit-outs, refurbishment and predicted area works
- Specific details for properties part of shopping centres
The lessee’s disclosure statement includes:
- A section to acknowledge the lessor’s statement
- Relevant attachments
- Specific statements or representations from the lessor’s statement being relied upon by the lessee
Lease disclosure statements are an integral part of leasing agreements, so it’s essential they are completed correctly. Failure to submit a disclosure statement by its due date can result in penalties. Fortunately, our friendly team at Wisdom Business Consultants can assist you to navigate the document and its technicalities. We offer commercial leasing packages specifically designed to help guide new business owners through the complexities of leases and disclosure statements; ensuring they can be confident and secure as they enter their new contract.
To get started, contact us here today!
References
- Griffin Legal. ‘Disclosure Statements – What Are They And Why Do I Need One?’, Griffin Legal, Online, 2016, https://griffinlegal.com.au/disclosure-statements-what-are-they-and-why-do-i-need-one/ (Accessed 18 July 2022)
- Small Business Commissioner. ‘Lease Disclosure Statements’, NSW Government, Online, 2022, https://www.smallbusiness.nsw.gov.au/get-help/retail-leases/disclosure-statements (Accessed 18 July 2022)
- Small Business Commissioner. ‘Retail Lease Disclosure Statement’, NSW Government, Online, [No Date], https://www.smallbusiness.nsw.gov.au/sites/default/files/2020-08/Schedule-2_Lessor-and-lessees-disclosure-statement_Form.pdf (Accessed 18 July 2022)
- NSW Legislation. ‘Retail Leases Act 1994 No 46’, NSW Government, Online, 2022, https://legislation.nsw.gov.au/view/html/inforce/current/act-1994-046 (Accessed 18 July 2022)
