Western Australian Current Acts

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12A .         Sinking fund for repairs etc., effect of lease requiring payment by tenant into etc.

        (1)         This section applies if provision is made in a retail shop lease in respect of premises in a retail shopping centre for payments to be made by the tenant into a sinking fund for repairs or maintenance or any similar purpose.

        (2)         The purpose of the sinking fund is to be specified in the retail shop lease.

        (3)         The lease shall be taken to provide that —

            (a)         the landlord is to, as soon as practicable, pay amounts paid by the tenant for the credit of the sinking fund into one or more appropriately designated interest bearing accounts held by the landlord with a bank in the State; and

            (b)         the landlord may only apply amounts standing to the credit of the sinking fund and interest earned on the fund for —

                  (i)         the purpose mentioned in subsection (2); and

                  (ii)         taxes and imposts payable on the fund; and

                  (iii)         the cost of an audit referred to in paragraph (c)(iii); and

                  (iv)         accounting, legal and other professional costs reasonably incurred in the preparation and approval of the scheme of repayment referred to in paragraph (e);


            (c)         the landlord is to —

                  (i)         keep full and accurate accounts of all money received or held by the landlord in respect of the sinking fund; and

                  (ii)         keep the accounts in such manner that they can be conveniently and properly audited; and

                  (iii)         at the end of each accounting year cause the accounts to be audited by an auditor who is a registered company auditor within the meaning of the Corporations Act 2001 of the Commonwealth; and

                  (iv)         within 3 months after the end of each accounting year deliver a copy of that report to the tenant;


            (d)         subject to subsection (5), the landlord is liable to pay into the sinking fund any deficiency attributable to the failure by the landlord or any predecessor in title of the landlord to comply with paragraph (a) or (b); and

            (e)         if the retail shopping centre is destroyed, demolished or ceases to operate the landlord is to —

                  (i)         prepare a scheme of repayment detailing —

                        (I)         the amount standing to the credit of the sinking fund (including any interest earned on the fund); and

        (II)         the relevant proportion of that amount to which each former tenant is entitled; and

        (III)         the way in which the landlord proposes to distribute that amount based upon the relevant proportion;


                  (ii)         submit the scheme of repayment to the Tribunal for approval under subsection (4).

        (4)         The Tribunal is to examine a scheme of repayment submitted under subsection (3)(e)(ii) and may approve the scheme or require such amendments to be made to the scheme as the Tribunal thinks fit and the landlord is to repay to each former tenant the amount set forth in the scheme of repayment or amended scheme of repayment, as the case requires.

        (5)         A landlord is only liable for a deficiency under subsection (3)(d) in respect of a claim for that deficiency notified to the landlord by the tenant within a period of 3 years following the receipt by the tenant of the copy of the report of the auditor referred to in subsection (3)(c)(iv) disclosing the deficiency.

        (6)         If a landlord does not comply with the requirement referred to in subsection (3)(c)(iv), the tenant is not obliged to pay, and the landlord is not entitled to recover, payments to the sinking fund from the date of that noncompliance until the landlord complies with that requirement.

        (7)         In this section and in section 12B

        bank means —

            (a)         an ADI (authorised deposit-taking institution) as defined in section 5 of the Banking Act 1959 of the Commonwealth; or

            (b)         a bank constituted by a law of a State, a Territory or the Commonwealth;

        former tenant in relation to premises means the last tenant to carry on business at those premises.

        [Section 12A inserted: No. 66 of 1998 s. 9; amended: No. 26 of 1999 s. 65(2) and (3); No. 10 of 2001 s. 220; No. 55 of 2004 s. 122.]

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