Essential requirements for the Lessor Disclosure Statement in a retail shop lease

The Lessor Disclosure Statement is a crucial document provided by the lessor to a prospective lessee before entering into a retail shop lease. Its purpose is to ensure transparency and inform the tenant about essential lease details.

Who can prepare a Lessor Disclosure Statement? 

Typically, if a lessor has appointed a solicitor to prepare the relevant lease documents, the solicitor will also prepare the lessor disclosure statement using the relevant prescribed form. 

However, a lessor can prepare this themselves as they would usually hold the relevant information that needs to be disclosed.  A lessor may request their agent to assist with completing the statement.

The lessor disclosure statement must be signed by the lessor or their authorised representative.

When does a Lessor Disclosure Statement need to be provided?

Section 21B of the Retail Shop Leases Act 1994 (Qld) (RSLA) mandates that at least 7 days before the lease agreement is signed by the lessee, the lessor must provide to the prospective lessee:

• a draft of the lease; and
• the lessor disclosure statement.

If the retail lease includes an option for the lessee to renew the lease, then the lessor must also give the lessee an up-to-date lessor disclosure statement within 7 days after the day on which the lessor receives the lessee’s notice exercising the option to renew [1].

Failing to provide the lessor disclosure statement

If either:

• the lessor does not provide the disclosure statement as required; or
• the lessor disclosure statement is defective,

then the lessee may terminate the retail shop lease by giving written notice to the lessor within 6 months after the lessee signs the lease [2].

The lessor disclosure statement will be defective if it is incomplete or contains false or misleading information.  The statement won’t be defective if it merely omits information that is irrelevant to the lease, or its layout doesn’t comply with the prescribed form.

Additionally, the lessee won’t be able to terminate the lease for a defective statement if the lessor acted honestly and reasonably in giving the disclosure statement and the lessee is in substantially as good a position as they would be if the statement were not defective.

The lessor may be liable to pay reasonable compensation to a lessee for loss or damage suffered because of a defective statement.

Can a prospective lessee waive the 7-day disclosure period in order to sign the lease?

Yes, a prospective lessee can sign the lease documents earlier than 7 days after the draft lease and lessor disclosure statement is issued, if the prospective lessee gives to the lessor:

• a waiver notice under section 21B of the RSLA; and
• a legal advice report for the lease under section 22D of the RSLA which states that a lawyer has given the prospective lessee legal advice about the meaning and effect of the waiver.

Read more about property leasing: Outgoings under a Retail Shop Lease: Who has to pay.

Or read more property management articles.