Casual mall licensing code
What is the casual mall licence?
A casual mall licence is a short-term licence (for a term of six months or less) to use part of the floor space of a mall in the common area of a retail shopping centre for the sale of goods or services or both by a retailer.
About the Code
The Code is intended to apply to all casual mall licensing in retail shopping centres in South Australia. It deals with aspects of the relationship between the lessor of a shopping centre and lessees in the centre. It is intended to clarify some important parts of the relationship between a lessor and a lessee. To do this it sets out some basic rules about what the parties to a lease must do in a retail shopping centre where casual mall licensing occurs. It is part of the Retail and Commercial Leases Act 1995. The most important feature of the Code is that it requires a lessor to disclose some important information to the lessees of a retail shopping centre.
Requirements of the Code
The Code requires a lessor to do certain things. A lessor who engages in, or intends to engage, in casual mall licensing must:
- develop and make available a policy on casual mall licensing
- designate the areas within the shopping centre where casual mall licensing may operate
- take reasonable steps to ensure that lessees within the shopping centre know of the existence of the policy
- establish a process for advising lessees of any changes to casual mall licensing policy, practices, sites or areas
- make details of the process available to lessees on request and without charge.
A lessor has to give a prospective lessee the following information in writing:
- whether the lessor engages in the practice of casual mall licensing in the shopping centre to which the lease relates
- a plan showing the areas within the centre where casual mall licensing may operate
- whether the practice of casual mall licensing may result in the introduction of a competitor
- information about the process in place for advising lessees of any changes to policy and practices in relation to casual mall licensing and the designated sites or areas
- a copy of the Code.
The lessor has to give the details referred to above to a prospective lessee before the formation of any lease, and at the same time as the disclosure statement required by the Retail and Commercial Leases Act 1995.
Changing a policy
A lessor may change the policy and practices in relation to casual mall licensing and the designated sites or areas for such licensing as long as it is done in accordance with the process established under the Code.
If a lessor makes any change to any policy or practice or to any plan, the lessor must provide all lessees in the shopping centre with a written copy of the change, and, in the case of changes to a plan, with a copy of the plan incorporating any changes made.
No change to any policy, practice or plan has any effect until 30 days after the lessor has complied with the requirements of the Code.
The occupation of part of a mall pursuant to a casual mall licence must comply with the plan and the policy disclosed to lessees.
Benefits to lessees
The occupation of part of a mall pursuant to a casual mall licence must not:
- substantially interfere with access to the premises of an existing lessee
- substantially reduce the flow of customers to the premises of an existing lessee
- substantially interfere with sightlines to premises occupied by an existing lessee or
- result in the unreasonable introduction of a direct competitor to the significant disadvantage of an existing lessee occupying premises in front of, or immediately adjacent to, an area that is the subject of the casual mall licence, except where the casual mall licence is granted to an internal direct competitor and:
- the direct competitor occupies at least one retail shop in the same retail precinct in which the relevant casual mall licensed area is located
- the relevant casual mall licensed area is the closest available casual mall licensing area to the direct competitor's retail shop
- the introduction occurs during a designated sale period or
- the relevant casual mall licensed area is located in the retail shopping centre's centre court
- unless the specific interference, reduction or introduction has previously been disclosed to the existing lessee and the existing lessee has consented in writing to the interference reduction or introduction.
A person directly competes with another if more than 50% (on an area occupied by display basis) of the goods displayed for sale by the person are the same as more than 20% (on an area occupied by display basis) of the goods displayed for sale by another person.
Contributions to outgoings
The lessor has to make a contribution to centre outgoings from the income the lessor generates by casual mall licensing. The contribution must be at least equivalent (on a dollar per square metre annualised basis) to the contribution made to outgoings by existing lessees. The lessor will take the contribution into account when calculating the amount of non-specific outgoings payable under section 34 of the Retail and Commercial Leases Act 1995.
A lessor must establish and advise lessees about a point of contact for lessees who have any concerns about, or are aggrieved by, any matter relating to casual mall licensing. If any concern or matter cannot be resolved by discussion between a lessee and the point of contact nominated by the lessor, the parties may seek mediation by a mediator agreed to by all parties.
If the parties cannot agree on a mediator, the matter may be referred to the Office of Small Business Commissioner for mediation under the Retail and Commercial Leases Act 1995.
Further advice and information
For information about the legislation, you can contact the Office of the Small Business Commissioner.
For most day-to-day issues, the rights and obligations of lessors and lessees are contained in the lease negotiated between them and they will be legally bound to comply with it. Neither party should agree to a lease unless they have a clear understanding of their rights and obligations under the lease. You should get some independent financial and legal advice before you agree to a lease. The Office of the Small Business Commissioner cannot provide legal advice or interpret the provisions of a lease.
Preliminary legal advice is available from either:
Community Legal Advisory Service
The Law Society of South Australia
124 Waymouth Street
Adelaide SA 5000
Telephone (08) 8229 0222
Legal Help Line
Legal Services Commission
82-98 Wakefield Street
Adelaide SA 5000
Telephone 1300 366 424
For legal advice, call Monday to Friday 9.00am - 4.30pm
Some industry organisations also provide advisory and/or legal services for their members, including:
Master Grocers Australia