The WA State Government recently announced a review of the Commercial Tenancy (Retail Shops) Agreements Act 1985, legislation designed to protect small businesses leasing retail spaces. While REIWA supports fair tenancy practices, we also recognize the need for a balanced approach that doesn’t unfairly burden smaller landlords.

What’s being proposed?

The review recommends several key changes:

• Expanding the Act’s reach: More service-based businesses outside shopping centres would be included.
• Increased disclosure requirements: Landlords would need to provide tenants with detailed information, including foot traffic data, redevelopment plans, marketing strategies, and competitor details.
• Covering larger businesses: Retail spaces over 1,000 sqm could be brought under the Act’s purview.

REIWA’s concerns:

While we advocate for small business protection, these changes could have unintended consequences:

• Increased burden on small landlords: Meeting complex disclosure requirements could be challenging for those owning single properties or small strip malls, potentially leading to penalties for minor errors.
• Discouraging retail leasing: Added compliance complexity might deter smaller landlords from leasing to retail tenants altogether.
• Unnecessary extension of coverage: Larger businesses over 1,000 sqm often have significant negotiating power and may not require the same level of protection.

REIWA’s advocacy:

We’re actively engaging with the State Government to ensure a fair outcome for all stakeholders. Our recommendations include:

• Two-tiered disclosure regime: A comprehensive system for large shopping centres and a simplified version for smaller properties.
• Careful consideration of service businesses: Ensuring only relevant service businesses are included under the Act.
• Targeted protections: Reviewing the inclusion of larger businesses to ensure protections are truly necessary.

What can you do?

We encourage all smaller landlords and tenants to:

• Stay informed: Keep up-to-date on the proposed changes and their potential impact.
• Engage with REIWA: Share your perspectives and concerns with us.
• Seek advice from your agent: Discuss any questions you may have about your leasing arrangements.

REIWA is committed to advocating for a balanced and viable commercial leasing environment in Western Australia. Holdsworth Real Estate will continue to provide updates and information as this issue progresses.