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RETAIL LEASES ACT 2003 - SECT 23

Key-money and goodwill payments prohibited

S. 23(1) amended by No. 69/2012 s. 6(1).

    (1)     A landlord must not seek or accept the payment of—

        (a)     key-money; or

        (b)     any consideration for the goodwill of any business carried on at the retail premises.

Penalty:     50 penalty units.

    (2)     A provision of a retail premises lease is void to the extent that it requires the payment of key‑money or consideration for goodwill or has that effect.

    (3)     However, subsections (1) and (2) do not prevent a landlord from—

        (a)     recovering from the tenant costs which the landlord reasonably incurred in investigating a proposed assignee of the lease or sub‑tenant of the premises; or

        (b)     recovering from the tenant costs which the landlord reasonably incurred in connection with—

              (i)     an assignment of the lease or a sub‑lease; and

              (ii)     obtaining any necessary consents to the assignment or sub-lease; or

        (c)     claiming goodwill from the tenant in relation to the sale of a business that the landlord operated from the retail premises immediately before its sale, if the lease was granted to the tenant in the course of the sale of the business; or

        (d)     receiving payment of rent in advance; or

        (e)     securing the performance of the tenant's obligations under the lease by requiring a bond, security deposit or guarantee to be provided from the tenant or any other person (such as a requirement that the directors of a corporation guarantee performance of the corporation's lease obligations); or

        (f)     seeking and accepting payment for plant, equipment, fixtures or fittings that are sold by the landlord to the tenant in connection with the lease being granted; or

        (g)     seeking and accepting payment for the grant of a franchise in connection with the lease being granted.

S. 23(4) amended by No. 69/2012 s. 6(2).

    (4)     Any payment made, or the value of any benefit conferred, by the tenant and received by the landlord contrary to this section may be—

        (a)     recovered by the tenant from the landlord in a court of competent jurisdiction as a debt due; or

S. 23(4)(b) substituted by No. 82/2005 s. 14.

        (b)     otherwise recovered by the tenant from the landlord as determined under Part 10 (Dispute Resolution).

S. 23(5) inserted by No. 69/2012 s. 6(3).

    (5)     In this section, "landlord" means—

        (a)     a landlord; or

        (b)     a person acting on behalf of a landlord or prospective landlord; or

        (c)     a prospective landlord.



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