What information in relation to outgoings is a landlord required to provide to a tenant?

The landlord must provide the tenant with the following information in relation to outgoings:

Copy of the lease at negotiation stage
Section 15 of Retail Leases Act 2003 provides that as soon as negotiations are entered into, the landlord must provide the tenant with a copy of the lease which must describe the type of outgoings that the tenant is expected to pay throughout the term.  The landlord may be liable for 50 penalty units if the landlord fails to provide the copy of the lease at negotiation stage.

Disclosure statement
Section 17 of the Act provides that a landlord must give a disclosure statement to the tenant at least 7 days prior to entering into the lease.  The disclosure statement must include estimates of the outgoings that the tenant is expected to pay in the first year of the lease.  If the disclosure statement is not provided, the tenant is not liable for the payment of rent if the tenant has provided the landlord with written notice within 7 days before, or 90 days after, entering into the lease.

Estimate of outgoings
Section 46 of the Act provides that the landlord must give the tenant a written estimate of the outgoings for which the tenant is expected to pay under the lease.  The estimate must be given before the lease is entered into, and one month before the end of the landlord's accounting period.  The tenant is not required to pay for outgoings until the estimate is given.

Statement of outgoings
Section 47 of the Act provides that the landlord must prepare a written audited statement that details all the landlord's expenditure in each of the landlord's accounting periods on account of outgoings to which the tenant is liable to contribute.  The landlord must give the statement to the tenant no later than 3 months after the end of each accounting period.  Note the statement does not have to be an audited statement if the tenant is only required to pay for GST, utilities, council taxes and insurance, and the statement is accompanied by the relevant invoices, assessments or receipts.

Advertising and promotion statement
If the tenant is located in a shopping centre, section 71 provides that the landlord must provide a written audited statement that details all expenditure by the landlord in each of the landlord's accounting periods on account of advertising and promotion costs.  The landlord must give the statement to the tenant no later than 3 months after the end of each accounting period. 

Example
Consider that the tenant is leasing retail premises from the landlord which forms part of a shopping centre.  The landlord's accounting period is the financial year, the end of which is 30 June.  The information that the landlord must provide to the tenant is:

Before entering into a lease:
• a copy of the lease at negotiation stage;
• a disclosure statement; and
• an estimate of outgoings.

By 31 May each year of the lease term:
• an estimate of outgoings.

By 30 September each year of the lease term:
• a written statement of outgoings (which is to be audited if the tenant pays outgoings additional to statutory rates, taxes and insurance); or
• audited advertising and promotion statement.

If you have further queries about outgoings, contact the VSBC on (03) 9651 9316.