Commercial Tenancies and the appointment of a Small Business Commissioner for Western Australia

In November 2011, after a somewhat tortuous passage through Parliament, the Commercial Tenancy (Retail Shops) Agreements Amendment Bill 2011 (Commercial Tenancies Bill) and the related Small Business and Retail Shop Legislation Amendment Bill (Small Business Bill), passed into law.

The main stated objectives of the Commercial Tenancies Bill were to require more information to be provided to tenants in disclosure statements; to enhance security of tenure and make rent reviews more equitable; to prohibit landlords from passing on certain legal fees to tenants; and to give the State Administrative Tribunal the power to hear claims regarding misleading and deceptive conduct.

These were lofty aims, and the legislation went some of the way towards achieving them. The main thing it did not do was establish a lease register. Many smaller tenants feel that the terms offered to them are far less favourable than the terms given to anchor tenants in shopping centres, and that a lease register would provide greater transparency in relation to lease terms.

According to the Minister the issue of the lease register is still on the agenda (after another round of consultation), but it remains to be seen whether and when this will see the light of day. I therefore argued for an amendment to the Bill that would alleviate the concerns of smaller tenants in the short term.  The amendment required landlords to include in the disclosure statement given to prospective tenants certain relevant information (including rental terms, incentives and outgoings) about other leases in the same building or retail shopping centre, in order to provide a level playing field for the negotiation of lease terms. Unfortunately the amendment was defeated.

The main stated objectives of the Small Business Bill were to encourage the fair treatment of small businesses in their commercial dealings with other businesses and with government; to provide support to small business in their transition to a more deregulated trading environment; to reduce the vulnerability of small business to unfair market practices; and to reduce the frequency and cost of disputes involving small businesses.

In order to achieve these objectives the new Act legislates the appointment of a Small Business Commissioner, whose office will provide alternative dispute resolution services and education and guidance to avoid disputes. The Commissioner will also receive and investigate complaints from small businesses where they encounter difficulties in their commercial dealings with government agencies, and will assist small business with the resolution of retail tenancy and unfair market practice disputes.

This legislation is, in my view, a step in the right direction.  I will be watching closely to see if the resourcing provided to the Small Business Commissioner matches the responsibilities and workload of the office.

I remain committed to the support of small business and look forward to your feedback in relation to issues arising within this portfolio in 2012 and beyond.