New Landlord Disclosure Statements in December 2022

Why the change?

The RLA provides that a landlord, in certain circumstances, must provide a disclosure statement to its tenant under an applicable retail lease in a prescribed form. The prescribed forms can be found in the Retail Leases Regulations 2013 (2013 Regulations).

The 2022 Regulations seek to update the prescribed forms to bring them in line with changes to the RLA in 2020 and to tidy up other minor inconsistencies, mostly for the benefit of a tenant.

Impact

Pursuant to the RLA, a landlord must give its tenant a disclosure statement in the prescribed form:

1. at least 14 days before entering into a retail lease (with a separate prescribed form required for premises’ located in a shopping centre);
2. at least 21 days before the end of the current term of a lease where the tenant has exercised (or is entitled to exercise) an option to renew the lease; and
3. no more than 14 days after it has entered into an agreement with the tenant to renew the lease.

The 2022 Regulations make the following amendments to the prescribed forms found in the 2013 Regulations.

Schedule 1 – Landlord’s Disclosure Statement (Retail Premises not located in Retail Shopping Centres)‍

• Updating the explanatory cover note to advise that a landlord must provide the disclosure statement and proposed lease to a tenant at least 14 days before signing a new lease. Failing this, the lease is taken to commence 14 days after these documents are provided to the tenant.
• Inserting explanatory notes in the disclosure statement advising a reader of the landlord’s obligations regarding repairs and maintenance work under section 52 of the RLA.

Schedule 2 – Landlord’s Disclosure Statement (Retail Premises located in Retail Shopping Centres)‍

• Updating the explanatory cover note to advise that a landlord must provide the disclosure statement and proposed lease to a tenant at least 14 days before signing a new lease. Failing this, the lease is taken to commence 14 days after these documents are provided to the tenant.
• Inserting explanatory notes in the disclosure statement advising a reader of the landlord’s obligations regarding repairs and maintenance work under section 52 of the RLA.

Schedule 3 – Landlord’s Disclosure Statement on Renewal of Lease‍

• Inserting a requirement for a landlord to disclose details of any changes from the previous disclosure statement relating to a renewal of lease, alteration and demolition works and any costs not included in the lease or referred to in the statement of outgoings.

Risks for Landlords

While the changes to the prescribed forms are minimal, it is important that landlords utilise the updated wording so that they are fully complying with the requirements of the RLA.

It is unlikely that a tenant would be successful in making a claim against a landlord for a misleading, false or materially incomplete disclosure statement if the changes were not adopted, but why would they risk it?

Conclusion

If you use disclosure statement precedents – update them on 1 December 2022!

Better still, always revisit the 2013 Regulations to extract the prescribed form disclosure statements when needed to mitigate your risk of non-compliance.

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‍This article in no way constitutes legal advice. It is general in nature and is the opinion of the author only. You should seek legal advice tailored to your individual circumstances before acting on anything related to this article.