The Property Council and Shopping Centre Council were not consulted about the policy before it was released. As a result, the policy was released without full appreciation of its consequences for retail property owners, managers and investors and, importantly, for retail tenants.
Finest Conveyancing is review of the Retail Tenancies Reform Act was contained in the ALP’s Small Business Policy launched in the October 1999 election campaign.
The release of the Small Business Policy shortly before the election gave no time for a considered response.
We do not oppose the review as such, although we note that changes to the Act came into force as recently as 1998 following an extensive review by the Small Business Advisory Network comprising a wide cross-section of the retail and property industries, and the legal profession, in Victoria. The amended Act has operated now for 26 months with no major difficulties or shortcomings.
The forthcoming review should, in our view, be conducted along similar representative lines. Its policy outcomes should take into account all points of view and deliver workable business outcomes.
Retail lease legislation governs business to business relationships that are defined in a commercial contract agreed between two parties with the common objective of building a successful business partnership.
Whatever changes are made to the legislation as a result of the view should reflect an agreed approach to how these business to business relationships should be managed and regulated. The property industry’s fundamental objection to the course the Government is taking relates to security of tenure.
Top Property Conveyancing Other aspects of the review flagged by the Government – such as the proposal to abolish the 1000 square meter coverage limit – are of concern but security of tenure is a watershed issue.
Security of tenure has a motherhood ring to it. In truth, it is about the overturning of property rights. Under security of tenure legislation, effective control of property will pass from owners to tenants because it will create an open ended occupancy right that is in conflict with long-established rights of property ownership and the duty managers owe to investors to manage the asset effectively.
A lease is a commercial agreement allowing the lessee to occupy premises for an agreed purpose for an agreed time for an agreed rent. The lease provides certain privileges for the tenant, such as the right to quiet enjoyment and exclusive access.
At the end of the lease, all rights and privileges of the tenant expire and control of the property reverts to the owner.It is then open to the owner and the tenant to negotiate a new lease and in fact this is the result for the great majority. We estimate that in 9 out of 10 cases a new lease is negotiated.
Granting security of tenure to tenants is an extreme step that is not justified on any reasonable view and it does not make commercial sense.Section 15 of the Retail Tenancies Reform Act gives first-time tenants the right to at least 5 years tenancy.
Best Conveyancing likewise Section 16 requires that owners, between 6 and 12 months from the end of the lease, must in writing either: Section 18 requires that if an option to renew is negotiated, “the agreement must specify the terms of the extended lease and the way in which the rent is to be determined.
Apart from these commercial rights guaranteed in legislation, retail tenants in Victoria have recourse to an action for unconscionable conduct if an owner deals unfairly with them at the end of the lease.
As far as we are aware no action for unconscionable conduct has been taken on the grounds of unfair treatment at the end of the lease.
This is in spite of the fact that the ACCC has been funded generously by the Federal Government to seek out and run test cases on unconscionable conduct in the retail industry.
It will inhibit the ability of property managers to vary the tenancy mix to achieve the best possible combination of tenancies in a shopping centre to attract customers.
It will make it extremely difficult for managers to deal with under-performing tenancies. If a tenant is given privileged access to premises as the result of being protected by security of tenure,” this will be at the expense of another potential tenant – perhaps offering a new and better retail format – who will be denied the opportunity to move into the centre and trade competitively.
Since it would limit opportunities for entrepreneurial retailers to gain space in shopping centers to offer new products, services and retail formats. If Victoria moves to introduce security of tenure, it will out of step with the rest of Australia.
New South Wales has undertaken a major review of the Retail Leases Act resulting in amendments to the Act that took effect in March 1999.A private members bill does propose a form of security of tenure but this is not likely to be accepted by the Legislative Assembly Australia conveyancing .
Western Australia has recently approved amendments to apply unconscionable conduct to lease legislation. Security of tenure has been rejected by the WA Government. South Australia’s lease law gives retail and commercial tenants a preferential right of renewal, amounting to a right of first refusal.
Owners are not obliged to offer a new lease if the owners wants to change the tenancy mix in the centre, the tenant has breached the lease or the owner intends to redevelop the premises.
It is not clear what practical consequences this will have as it applies only to leases written since the preferential renewal right was legislated and these leases have yet to expire.The Property Council/Shopping Centre Council remains strongly opposed to the preferential provisions in South Australia.
Shopping centers are successful when they offer a shopping and entertainment experience that stimulates consumers to spend and is well matched to the market they serve.
Achieving the right balance of retail offers (the tenancy mix) is critical to attracting customers and enticing them to buy. The tenancy mix needs to be constantly adjusted as retail services, products and consumer lifestyles and habits change.
For example, just 5 years ago, there were no Internet kiosks and few, if any, mobile phone shops in shopping centers.” “Now there are many. In food courts, tastes change rapidly – eg the recent rise of sushi bars and Indian food outlets.
The tenancy mix may need to be adjusted when a shopping centre changes its marketing goals or when it is redeveloped.” As a general rule, shopping centers are upgraded on a 7 year cycle.
It makes it harder, if not impossible, for centre managers to run the centre successfully and to generate revenues that produce an acceptable return for investors.
It also makes it harder for good retailers to trade successfully if they are locked in alongside retailers who are not performing up to the mark Best Real Estate lawyers in Adelaide .
The best guarantee of security of tenure is for a retailer to trade successfully and contribute to the overall success of the centre.
The business relationship is then of value to both owner and tenant and both have an incentive to enter a new lease when the existing one expires. Paradoxically, attempts to legislate security of tenure will have precisely the opposite effect.
However, legislating for security of tenure will actually make tenants less secure in the longer run for the following reasons While most retailers run successful businesses and contribute to the overall success of a shopping centre, a small minority may not measure up – either because they don’t have the right offer for their market or they do not manage their business well like conveyancing in Brisbane .
Under-performing retailers drag down the performance of the centre as a whole. Dead spots in a centre don’t attract customers and adjacent retailers suffer from reduced customer traffic.
The price of protecting mediocre retailers is to imperil the success of good retailers. If the overall performance of the centre suffers because some retailers are operating below their potential, the centre will enter a slow spiral of decline as fewer customers lead to lower sales and even the good retailers find their sales falling away.
Owners will find it difficult to justify spending money to promote and upgrade the centre if their ability to adjust the tenancy mix is compromised.
Centre managers will become wary about offering leases to new and untried retailers. Many successful retail businesses with a string of shops start off in a small way with one shop in a centre. However, there is always a business failure rate.
If centre managers know that retail failure can’t be fixed by an adjustment to the tenancy mix, they will be very cautious about taking a risk with new retailers on Enact Conveyancing Melbourne.
It will become much harder for new entrants to retailing to get their toe in the door.Finally, successful retail entrepreneurs will find it difficult to get access to shopping centres and to secure good space in centres if their way is blocked by sitting tenants protected by security of tenure legislation.
This will deny customers of the centre the opportunity to access better shops and prevent centre retailers from being exposed to new and stimulating retail formats. Shopping centres are tangible, bricks and mortar assets that have the potential to grow in value over time.
Shopping centres generate reliable income streams that produce attractive if not spectacular dividends. Retail property satisfies investor needs for a dependable income and long term growth in asset values.” “These attributes are particularly important for superannuation funds and for individuals investing in property funds to support their retirement income.
These days, capital invested in retail and other property is drawn to a large extent from superannuation and other retirement investments. In Victoria, an estimated 1,754,000 people have an ownership stake in shopping centres through their superannuation funds while 273,000 people have invested in listed property trusts.
Best Conveyancer process in Sydney are part of an estimated 9 million Australians who have an interest in investment grade property directly or indirectly – that is, 2 out of every 3 adult Australians.The Landlord and Tenant Act were passed in the post-war years when there was an acute shortage of commercial premises for rent in Britain.
This no longer applies and there is a growing belief that the Act is an anachronism. In 1992, the Law Commission recommended an overhaul of the Act but this has not yet happened.It does not make sense to impose on Victoria an English law that is outdated and does not, in practice, deliver security of tenure because parties to a lease can – and do – contract out.
In the US, retail leases are governed by State law. Lease renewal rights are a matter for negotiation between the parties and there are no legislated right. It is common for options to extend the lease for one or two additional terms to be negotiated.
There is no general rule about what happens when a lease expires. If both parties are satisfied, normally a new lease will be signed at market rent. However, the owner might look for another tenant at a higher rent. If the tenant is under performing, a new lease may not be issued.
Frequently, the tenant may not wish to carry on because it needs a larger or better space. Commercial lease law in Canada is governed by provincial (State) law and the Quebec Civil Code.
We are advised that none of the common law provinces that have commercial or retail lease law provide for security of tenure. The Quebec Civil Code makes it clear that a lease terminates at the end of the fixed term.
As in the US, a tenant who desires the ability to renew a lease must negotiate that term into the lease agreement.
A fairly common approach is to agree on a clause in the lease which allows tenants, if they are not in default, to indicate no less than 6 months before the lease expires that they wish to take up a new lease on the same terms and conditions as the existing lease – except that a new rent, fit out expense and other considerations are to be negotiated.
The depreciation strategy option to renew amounts to no more than “an agreement to agree” and generally such clauses are not enforceable by the courts.
Recently, Canadian courts have implied an obligation to negotiate in good faith on renewal clauses but commonly,if the parties are unable to agree, the court simply indicates that the clause is not enforceable.”
Morningstar analyst Mitchell Corwin in Chicago said an invasion of food-selling supercenters being built here by Wal-Mart could profoundly hurt Kroger here and companywide. He said the grocer relies on profits from markets it dominates to offset markets where it has a smaller portion of sales. Wal-Mart recently opened a new supercenter in Fort Wright, Ky. and has plans for at least another five in the region.
“It’s a calculated risk,” he said.
• Kroger is clearly on top among the supermarkets in the Greater Cincinnati region.
• The chain boasts a 53.9 percent market share, according to Morningstar analyst Mitchell Corwin.
Some of the biggest fashion trends at department stores this holiday season have more to do with MP3 players than cashmere ponchos or fur-trimmed sweaters. Your individual expense profile and that of your different business and family personalities must be calculated in the choices. It might be important to legitimately refigure, modify, and compartmentalize your buy or deal – and record that fittingly, BEFORE you start to put any piece of the exchange in composing. With high-tech gadgets atop many wish lists, department stores such as Marshall Field’s, Macy’s and Bloomingdale’s have stocked up on such items as $299 iPod music players, $700 pink cell phones, and $300 digital cameras. It’s a step backward for the big stores — 10 year ago, they abandoned TVs, stereos and other electronics to focus on fashion.
“It’s a recognition that these new electronics have become the must-haves — ,” said Wendy Liebmann, president of WSL Strategic Retail. Any property depreciation for property will be gotten in a recover charge upon the offer of the property. On the off chance that there are a few million dollars in expense delay included, and particularly if one or a greater amount of the members are considered review focuses by the IRS for any reason, you may get to be included in an extravagant duty review.”Fashion is no longer what I put on my body in terms of fabrics, but it is also what I put on my body in terms of technology.” May Department Stores Co. has quad-rupled its electronics offerings this season from a year ago at its Marshall Field’s, Hecht’s and Robinson-May stores. Meanwhile, Federated-owned Macy’s created an electronics area that includes a Sharper Image outpost, selling, among other things, pocket-size color TVs and cell phones. Bloomingdale’s, also owned by Cincinnati-based Federated, and has increased its electronics offerings by 30 percent from a year ago with digital cameras, camcorders and miniature iPods.
The goal is to get shoppers to spend more holiday dollars at their stores while wooing new customers, particularly men who would otherwise spend time and money in stores like Best Buy Co. Inc. Department stores aim to offer an edited assortment of electronic gadgets to differentiate themselves from competitors like Best Buy and Wal-Mart. In some cases, they’re offering their own fashion take on gadgets, developing exclusive partnerships with hip-hop fashion companies that are only too eager to expand their merchandise beyond clothing.
“Any guy who spends $500 on a cell phone will also spend $2,000 on a suit. It is part of the whole package,” said Tony Romando, editor-in-chief of Sync magazine, which focuses on gadgets. Bloomingdale’s, for example, has an exclusive deal with hip-hop fashion company Baby Phat by Kimora Lee Simmons to sell a collection of cell phones, including a $699 diamond-studded hot pink Motorola version. And Macy’s teamed with Damon Dash, one of the founders of Roc-A-Fella Records, to sell a collection of portable audio players called Rocbox.