COVID-19 Disease Emergency (Commercial Leases) Regulations 2020

The Regulations are compact and rely heavily on cross-reference to the Act. They introduce or clarify several principal concepts that alter the Act’s application.

“Statutory charge” is defined in regulation 3 and consists of (a) land tax within the meaning of the Land Tax Act 2000, (b) rates payable under the Local Government Act 1993, and (c) any fee or charge payable under an Act that becomes a charge on land if unpaid. The Regulations therefore make clear that certain common property-related fiscal obligations are “statutory charges” for the purposes of the Act, and capture other Act-based charges that attach to land as a legal consequence of non-payment. The definition incorporates specific external statutory sources by name, which means those Acts determine the details of the obligations that count as statutory charges under these Regulations (reg 3).

“The Act” is defined in regulation 3 as the COVID-19 Disease Emergency (Commercial Leases) Act 2020. The Regulations therefore operate as subordinate instruments that alter or clarify application of the Act’s key provisions, notably section 17(1) (the Act’s definition of rent), section 18 (a rent-renegotiation regime), and section 22(a) (a dispute category referenced in reg 7). The Regulations themselves do not restate the Act’s definitions of “protected lease” or other core terms; those remain matters of the Act.

Turnover is prescribed to be a factor for the Act’s statutory definition of rent in section 17(1) (reg 4(1)). Regulation 4(2) expressly treats “turnover” as including gross takings, gross receipts, gross income and any similar concept. Regulation 4(3) then lists discrete items that must not be included when calculating turnover for a protected lease: trade-in losses, refunded lay-by or instalment payments, refunded transactions already included, most finance charges payable to financiers (excluding credit-card/store-card commission), inter-shop exchanges for convenience, returns to suppliers, proceeds of sale of fixtures and fittings, customary discounts, uncollected credit written off, GST paid by the lessee, delivery charges, lottery ticket receipts (other than commission), and online transaction revenue except in two limited circumstances. The online transaction carve-out in reg 4(3)(m) includes online revenue only where the goods or services are delivered or provided from or at the leased premises (or a shopping centre of which those premises form part), or where the transaction occurs while the purchaser is at the leased premises (reg 4(3)(m)(i)-(ii)). In other words, the Regulations both mandate turnover as a component of rent calculations and materially constrain which receipts count for that purpose.

Regulation 5 sets a temporal constraint on repeated invocation of the Act’s section 18 rent-renegotiation mechanism. It provides that section 18 does not apply to a party at any time occurring within three months after the day on which the rent renegotiation most recently concluded, unless the parties agree in writing that the constraint does not apply in that period. Thus the Regulations build a minimum interval between renegotiations being made operative by the Act, subject to voluntary written waiver.

Regulation 6 operates where a protected lease requires the lessee to pay, otherwise than as rent, a fixed amount representing a statutory charge or an insurance premium payable by the lessor. If the lessor’s statutory charge or insurance premium is reduced, the lessee’s fixed payment must be reduced in the same proportion, unless the lessee has agreed in writing that the subregulation does not apply to them. Regulation 6 therefore links reductions in underlying lessor liabilities to corresponding reductions in lessee pass-through payments, while preserving contractual waiver by written agreement.

Regulation 7 removes clause 39 of Schedule 1 to the Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998 from applying to disputes that fall within section 22(a) of the Act. The effect is to exclude that particular mediation provision in a specific set of Act-related disputes.

The Regulations are administered in the Department of Justice and were notified in the Gazette on 24 July 2020, which is also the recorded date of their publication (display note).

The Regulations affect lessees and lessors of “protected leases” as defined in the Act, participants in retail tenancy mediation governed by the Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998, and public bodies that levy statutory charges that can be passed through to lessees under lease terms.

Protected lessees are directly affected by multiple provisions. Regulation 4 prescribes the turnover concept and the exclusions applicable when calculating turnover for a protected lease for the purposes of section 17(1) of the Act. Those exclusions determine what receipts a lessee may rely on or must exclude when using turnover as a basis for rent renegotiation or for any statutory formula tied to “rent” under the Act. Lessees who are required by their leases to pay fixed amounts that represent statutory charges or insurance premiums are covered by regulation 6. Under reg 6(1), where the lessor’s statutory charge or insurance premium is reduced, the lessee’s fixed payment must be reduced in the same proportion, unless the lessee has previously agreed in writing that reg 6 does not apply to them (reg 6(2)). The presence of an express written opt-out mechanism transfers agency to the lessee: the lessee can preserve the status quo by written agreement, or insist on proportionate reduction where no such agreement exists.

Lessors are affected in the complementary way. When lessors’ statutory charges or insurance premiums are reduced, lessors must accept that any fixed lessee payment representing those obligations will reduce in the same proportion, absent a written agreement by the lessee to the contrary (reg 6). Lessors are also affected by regulation 4’s turnover prescription, because turnover will be a factor in calculating rent under section 17(1) of the Act, and the turnover exclusions set in reg 4(3) constrain the revenue items lessors can treat as contributing to lessee turnover for rent-related calculations. Lessors who seek to renegotiate rent repeatedly may find that section 18 of the Act will not apply in relation to a party at times occurring within three months after a previous renegotiation concluded, unless both parties agree in writing to waive that timing rule (reg 5).

Parties to retail tenancies who would otherwise use clause 39 of Schedule 1 to the Fair Trading Code of Practice for Retail Tenancies Regulations 1998 to mediate disputes must take account that regulation 7 removes that clause for disputes to which section 22(a) of the Act applies. The Act’s section 22(a) disputes are therefore treated differently by the Regulations; the parties cannot rely on that particular mediation provision for such disputes. The Regulations do not repeal other mediation mechanisms or clauses, but they do create a carve-out from this specific clause.

Public authorities and local governments that levy rates, land tax authorities, and statutory fee-collecting agencies are indirectly implicated because the Regulations define “statutory charge” by direct reference to obligations under the Land Tax Act 2000 and the Local Government Act 1993 and by capturing Act-based fees that become charges on land (reg 3). If those statutory charges are reduced (for example through a rebate or altered assessment), the Regulations require corresponding reductions in any fixed amounts lessees pay under protected leases that represent those charges, unless the lessee has contractually agreed otherwise (reg 6).

Finally, administrators and regulators central to dispute processes are affected. The Regulations are administered by the Department of Justice (display note). The Fair Trading regulator remains relevant in relation to the Retail Tenancies Code, but reg 7 narrows the Code’s mediation reach in the specific contexts identified by the Act.

The Regulations create concrete duties and rights for parties to protected leases and alter procedural options in dispute resolution. The duties and rights derive from four operational rules.

1. Turnover is a prescribed factor for rent calculations (reg 4(1)), and turnover must be interpreted to include gross takings, gross receipts, gross income and similar concepts (reg 4(2)). This is a directive to treat turnover as an input to any statutory rent definition tied to section 17(1) of the Act. Parties have the right to rely on a turnover-based measure of rent, subject to the exclusions that follow.

2. Parties must exclude specified items from turnover calculations for a protected lease (reg 4(3)). The listed exclusions are categorical and detailed. They include trade-in loss amounts (reg 4(3)(a)), refunded lay-by or instalment amounts (reg 4(3)(b)), amounts refunded when previously included in turnover (reg 4(3)(c)), most finance charges payable to financiers (reg 4(3)(d)) except commission on credit and store cards, inter-shop merchandise exchanges for convenience (reg 4(3)(e)), returns to suppliers (reg 4(3)(f)), proceeds of sale of fixtures and fittings after their use at the premises (reg 4(3)(g)), discounts allowed in the normal course of business (reg 4(3)(h)), uncollected credit accounts written off (reg 4(3)(i)), GST paid by the lessee in respect of the premises (reg 4(3)(j)), delivery charges (reg 4(3)(k)), proceeds from sale of lottery tickets other than commission (reg 4(3)(l)), and most online transaction revenue unless captured by the two enumerated exceptions (reg 4(3)(m)(i)-(ii)). The right to include bona fide turnover is therefore limited by these exclusions; parties may not lawfully count the excluded items when complying with the Act’s turnover-based rent provisions.

3. Timing constraint on renegotiation under section 18. Regulation 5 provides a duty to refrain from invoking the Act’s section 18 rent-renegotiation regime in relation to a party at any time occurring within three months after the day on which the most recent renegotiation concluded, unless both parties agree in writing that that timing constraint does not apply in that period. The provision therefore assigns a temporal right to stability for three months after renegotiation, by preventing repeated application of the Act’s section 18 with respect to the same party within that interval. The right can be contractually waived by a written agreement between the parties.

4. Proportionate reduction of lessee payments representing statutory charges or insurance premiums. Regulation 6(1) imposes a duty that, where a protected lease requires a lessee to pay a fixed amount representing a lessor’s statutory charge or insurance premium and the lessor’s charge or premium is reduced, the lessee’s fixed payment must be reduced in the same proportion. Regulation 6(2) preserves a right for the lessee to agree in writing that the subregulation does not apply. In effect the Regulation creates a statutory entitlement to proportionate reduction for lessees, conditional on absence of a written waiver.

5. Exclusion of a retail-tenancy mediation clause. Regulation 7 states that if a dispute in relation to a protected lease is a dispute to which section 22(a) of the Act applies, clause 39 of Schedule 1 to the Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998 does not apply in relation to that dispute. The duty here is a prohibition on using that specific mediation clause for those disputes. The Regulation thereby modifies dispute-resolution options available to parties when a dispute falls within section 22(a).

The Regulations preserve parties’ ability to make written agreements that alter how the Regulations apply to them in two contexts: first, reg 5 allows the parties to agree in writing to negate the three-month restriction on the Act’s section 18 rent-renegotiation application within an intervening three-month period; second, reg 6 allows a protected lessee to agree in writing that reg 6(1) does not apply to them. These written-agreement gates are explicit mechanisms for private ordering to override the default statutory treatment the Regulations impose.

There is also an implicit procedural duty to correctly calculate turnover in accordance with the exclusions in reg 4(3) when any Act process or statutory formula asks for turnover. Because reg 4 is expressly “for the purposes of the definition of rent in section 17(1) of the Act”, parties and decision-makers applying section 17(1) must treat turnover as defined and exclude the enumerated items.

Finally, the Regulations place an administrative duty on public authorities to note the instrument’s commencement in the Gazette (reg 2) and identify the Department of Justice as the administering agency in the display note. The regulations themselves were notified in the Gazette on 24 July 2020 (display note).

The Regulations do not themselves create new criminal offences, pecuniary penalties, or an express statutory enforcement regime beyond the operational adjustments they prescribe. They are procedural and definitional in character and rely on the enforcement architecture of the Act and of existing laws to produce remedies. The text supplied does not include penalty clauses or enforcement procedures specific to breaches of these Regulations. Accordingly, enforcement will principally depend on:

• any enforcement or remedial mechanisms contained in the Act that apply when the Act’s provisions are triggered, such as remedies for non-compliance with the Act’s rent or dispute-resolution provisions (the Regulations refer to sections 17, 18 and 22(a) of the Act, but do not restate enforcement mechanisms); and

• existing contractual remedies available under the protected lease itself, subject to the statutory modifications imposed by the Regulations, such as obligations to reduce fixed payments proportionately under reg 6(1).

The Regulations do signal mandatory directions. For example, reg 6(1) requires a reduction in a lessee’s fixed payment in the same proportion as a lessor’s statutory charge or insurance premium reduction. That is a substantive obligation with legal force as subordinate legislation. A failure by a lessor to respect reg 6(1) would leave the lessee to seek redress under the Act, through contract remedies, or through general legal proceedings to enforce statutory rights. The Regulations themselves do not specify the procedural route or tribunal. The most direct inference from the text is that compliance disputes invoke the Act’s dispute framework (the Act is the instrument being implemented), including any dispute resolution and judicial review options the Act provides. Regulation 7’s exclusion of clause 39 of the Fair Trading Code means that parties to disputes to which section 22(a) applies cannot rely on that specific Code mediation clause; therefore any enforcement or compliance process otherwise triggered by the Code’s mediation clause will not be available for those disputes.

Because the Regulations are administered by the Department of Justice (display note), the department will be the administrative point of contact for queries or compliance matters about the Regulations themselves, although the Act or other relevant statutes will determine legal remedies and enforcement procedures. The Regulations’ omission of explicit penalty provisions means that typical enforcement will be through application of the Act’s remedies, contractual enforcement, or judicial proceedings to enforce statutory obligations under the Act as modified by these Regulations.

The Regulations explicitly interact with several identified statutes and subordinate instruments by cross-reference and exclusion.

1. The Act. The Regulations operate as subordinate legislation that clarifies and prescribes matters for the purposes of the COVID-19 Disease Emergency (Commercial Leases) Act 2020. The Regulations expressly refer to section 17(1) (turnover as a factor in the Act’s definition of rent), section 18 (the Act’s rent-renegotiation provision, whose application is time-limited by reg 5), and section 22(a) (a class of disputes for which Fair Trading Code mediation clause 39 is displaced by reg 7). The Regulations do not restate the Act’s core definitions such as “protected lease”; instead they supply supplementary rules that must be read with the Act.

2. Land Tax Act 2000 and Local Government Act 1993. Regulation 3 defines “statutory charge” to include land tax within the meaning of the Land Tax Act 2000 and rates payable under the Local Government Act 1993. Those Acts thereby determine the operational content of “statutory charge” for the Regulations. Any change to the mechanics, assessment, or character of land tax or local government rates under those Acts will feed into whether an obligation qualifies as a statutory charge under these Regulations. Regulation 6 then ties reductions in these charges or insurance premiums to proportionate reductions in lessee fixed payments.

3. Other Acts that create Act-based fees or charges that become a charge on land. Regulation 3(c) is a catch-all: any fee or charge payable under an Act that, if unpaid, becomes a charge on land is included in the Regulations’ meaning of “statutory charge”. This cross-reference means that a range of charges created elsewhere could be brought within the Regulations’ remit if the other Act creates the legal consequence of a charge on land for non-payment.

4. Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998. Regulation 7 disapplies clause 39 of Schedule 1 to the Fair Trading Code with respect to disputes captured by section 22(a) of the Act. The interaction is a negative one: the Code’s clause 39 mediation route does not apply to those disputes. The Regulations do not repeal the Code but carve out its clause 39 for a specified class of disputes. Parties should therefore consider alternative dispute-resolution processes where a dispute falls within section 22(a) of the Act.

5. Rules Publication Act 1953. The display note records that the Regulations are displayed and numbered in accordance with the Rules Publication Act 1953. This confirms the procedural publication context for the instrument.

The Regulations therefore mediate the relationship between the Act and existing tax and local government charging regimes. Because reg 4(3)(j) expressly excludes GST paid by the lessee in respect of the premises, the Commonwealth GST regime is indirectly acknowledged: GST charged to the lessee should not be counted as turnover for the purposes of calculating turnover under section 17(1) of the Act as prescribed by reg 4. That exclusion coordinates, in a limited way, with Commonwealth tax law transactions, but the Regulations do not alter GST liability itself.

Where the Regulations permit written agreement to alter their operation (regs 5 and 6), those agreements will interact with general contract law and the Act. Written waivers will modify statutory defaults, and their legal effect will be governed by contractual principles as applied to statutory waivers. The Regulations do not supply a form of agreement or detail on how parties must record a written agreement beyond the express requirement that it be in writing.

The Regulations include minimal documentary history. They were notified in the Gazette on 24 July 2020, and they are administered in the Department of Justice (display note). The instrument records that it is displayed and numbered in accordance with the Rules Publication Act 1953.

No amendments, repeal provisions, or amendment dates other than the original notification date are shown in the text provided. The Regulations themselves rely by reference on other Acts and subordinate instruments for operative content, but the Regulations do not record any prior instruments or subsequent amendments in the supplied text. Any change to these Regulations would be recorded in the official legislative database or Gazette; the Regulations as presented should be read as the instrument made and notified on 24 July 2020.

Users should therefore treat the text provided as the original instrument and check the official legislative database or Gazette for any subsequent amendment, repeal, or replacement if contemporaneous compliance is required. The display note’s administration entry designates the Department of Justice as the administering agency, which is the contact point for official records and potentially for enquiries about later amendments.

The Regulations as supplied do not include any litigation history, judicial decisions, or case citations. The statutory text names no cases and does not mention court interpretations. There is therefore no litigation history recorded in this instrument that can be relied on to interpret these Regulations.

Interpreting or enforcing the Regulations in practice may produce litigation over time, particularly in respect of turnover calculations, the proportionate reduction mechanism in reg 6, the scope of the online transaction exclusion in reg 4(3)(m), and the consequences of the exclusion of clause 39 of the Fair Trading Code in reg 7. However, the Regulations themselves do not report any judicial determinations, appeal outcomes, or tribunal decisions. Practitioners should therefore look to the Act, lease contracts, and subsequent court or tribunal material (if any) for authoritative interpretations produced after the making of these Regulations.

Because the Regulations are subordinate to the Act, litigation about their operation may involve the Act’s dispute-resolution and enforcement framework. Any such litigation would be documented in court or tribunal records external to the Regulations themselves. Legal practitioners relying on the Regulations should perform current-case-law research to identify any subsequent interpretation by courts or tribunals, since none is supplied in the instrument text.

The Regulations contain several drafting features that create traps for transactional parties if unheeded. The following points identify specific pitfalls visible in the instrument.

1. Turnover is mandated as a factor, but turnover is narrowly defined for protected leases. Regulation 4(1) instructs that turnover is prescribed to be a factor for the purposes of section 17(1) of the Act. Regulation 4(3) then lists many exclusions. Parties who assume “turnover” equals total cash receipts will miscalculate. For example, GST paid by the lessee must be excluded (reg 4(3)(j)), delivery charges are excluded (reg 4(3)(k)), and most finance charges payable to financiers are excluded (reg 4(3)(d) , note the explicit exception for commission on credit cards or store cards). That exception is narrow and may alter revenue-sharing outcomes if card commission is treated differently from interest or merchant-finance fees.

2. Online revenue is mostly excluded unless closely tied to the premises. Regulation 4(3)(m) excludes online transaction revenue, except where the goods or services are delivered or provided from or at the leased premises or a shopping centre containing the premises (reg 4(3)(m)(i)), or where the transaction takes place while the purchaser is at the premises (reg 4(3)(m)(ii)). Sellers who fulfil online orders from other warehouses or fulfilment centres cannot count that online revenue as turnover for Act purposes. Parties who have omnichannel businesses should carefully segregate sales data to identify which online revenue meets the limited exceptions. Failure to segregate could materially reduce the turnover base available for rent calculations.

3. Written agreement gates are binding and narrow. Both regulation 5 and regulation 6 allow written agreements to opt out of the Regulations’ default effects. Under reg 5, the three-month restraint on invoking the Act’s section 18 does not apply if the parties have agreed in writing that the regulation does not apply in relation to a period in which the relevant time occurs. Under reg 6, a lessee may agree in writing that the proportionate reduction rule does not apply to them. Parties should therefore ensure that any intended waiver is documented in writing and that the writing meets contractual formality requirements. Conversely, an oral understanding will not displace the statutory default.

4. Clause 39 of the Retail Tenancies Code is excluded for some disputes. Regulation 7 disapplies clause 39 of Schedule 1 to the Fair Trading Code of Practice for Retail Tenancies Regulations 1998 for disputes to which section 22(a) of the Act applies. Parties who rely on the Code’s clause 39 mediation pathway must check whether their dispute falls within section 22(a) before relying on that route. The Regulation does not displace other code clauses, but the specific mediation procedure in clause 39 will be unavailable where section 22(a) applies.

5. The Regulations do not specify enforcement mechanisms. There is no express penalty provision in the Regulations themselves. Remedies and enforcement will therefore turn on the Act and contract law. Parties should consider whether their lease contains dispute-resolution, injunctive or specific-performance clauses that interact with the Regulations, and plan for enforcement through the mechanisms the Act and courts provide.

6. Narrow scope of “statutory charge” may produce disputes about inclusion. Regulation 3(c) captures "any fee or charge, payable under an Act, that, if it is not paid, becomes, under an Act, a charge on land." Whether a particular fee becomes a charge on land is determined by the other Act. Parties should not assume a municipal or statutory fee is a “statutory charge” without checking the other Act’s consequences for non-payment.

7. Temporal constraint may not affect all parties equally. Regulation 5 states that section 18 does not apply in relation to a party if the time occurs within three months after the last renegotiation, unless the parties agree otherwise. That is expressed in relation to “a party.” Parties should be careful in multi-lessee or subletting arrangements to determine exactly whose “time” is being assessed to avoid tactical misuse of the three-month bar.

8. The Regulations were made and notified quickly in response to the pandemic context. The text supplied does not record subsequent amendments or judicial gloss. Parties should verify current legislative status and any interpretative guidance issued by administering agencies.

These gotchas are all strictly derived from the Regulations’ text and the way they cross-reference the Act and other instruments. They show where small definitional or formality differences can have material outcomes for rent calculations, dispute procedure, and the financial obligations passed through in leases.

Compliance requires operational, contractual and record-keeping steps anchored to the Regulations’ prescriptions. The following checklist maps the Regulations’ requirements into practical actions for lessors, lessees, and advisers.

1. Identify whether the lease is a “protected lease” under the Act. The Regulations apply only to protected leases as defined in the Act. Before applying reg 4 to rent calculations or invoking reg 6 reductions, confirm that the lease falls within the Act’s protected-lease definition. The Regulations do not redefine protected lease status; they operate once the Act applies.

2. Turnover accounting and exclusions. For any turnover-based rent calculation under section 17(1) of the Act, apply the turnover inclusions and exclusions in reg 4:

   • Include gross takings, gross receipts, gross income and similar concepts (reg 4(2)).
   • Exclude items listed in reg 4(3)(a)-(m), for example GST paid by the lessee in respect of the premises (reg 4(3)(j)), delivery charges (reg 4(3)(k)), and most online revenue (reg 4(3)(m)).
   • Segregate and maintain clear ledger entries, receipts, and transactional records to show which sales qualify under reg 4(3)(m)(i)-(ii) for online revenue that is to be included.
   • Maintain documentation for refunds, write-offs, trade-ins, inter-shop exchanges and fixtures sales to demonstrate excluded items.

3. Estate-level and centre-level transactions. For businesses operating multiple outlets or a shopping centre, track inter-shop transfers separately as required by reg 4(3)(e). The exchange price between shops that are made solely for operational convenience must be excluded from turnover.

4. Payment-pass-through adjustments. If the lease requires lessee payment of a fixed amount representing a lessor’s statutory charge or insurance premium, monitor for any reduction in the lessor’s statutory charge or insurance premium. Under reg 6(1), you must reduce the lessee payment in the same proportion as the lessor’s reduction. Document the basis of the lessor reduction and the arithmetic used to calculate the lessee’s reduced fixed payment. If the lessee wishes to opt out of this protection, obtain a written agreement recorded to that effect (reg 6(2)).

5. Written agreements to contract out. The Regulations permit written agreements to displace two defaults. Ensure any waiver or opt-out is:

   • Expressly in writing;
   • Signed by the parties with appropriate authority; and
   • Filed and retained with lease records.

   For reg 5, if parties want to proceed with renegotiations within three months of a concluded renegotiation, obtain a written agreement to negate the three-month bar. For reg 6, obtain a written agreement from the lessee if the parties intend that reg 6(1) not apply.

6. Timing of renegotiation. Observe the three-month restraint in reg 5 before invoking or applying section 18 of the Act to renegotiate rent in relation to a party. Keep dated records of when a renegotiation concluded to prove the start of the three-month window. If parties intend to renegotiate within that window, secure a written waiver that specifically states it is intended to make reg 5 inapplicable for the defined period.

7. Dispute-resolution process. For disputes that may fall within section 22(a) of the Act, do not rely on clause 39 of Schedule 1 to the Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998, because reg 7 removes that clause for those disputes. Identify alternative dispute-resolution pathways under the Act, the lease, or other applicable codes. Document which dispute-resolution mechanisms have been exhausted or bypassed.

8. Administrative and departmental liaison. The Department of Justice administers the Regulations (display note). Use the Department as the first point of contact for administrative queries about the Regulations, and check the Department’s guidance or FAQs for interpretative material. Verify the current status of the Regulations and any later amendments by consulting the Gazette and official legislative databases.

9. Contracts and ancillary clauses. Review lease clauses dealing with rent reviews, turnover reporting, audit rights, pass-throughs for statutory charges, insurance, and online sales. Amend or clarify clauses to align with the Regulations where parties agree to do so. In particular, ensure turnover reporting clauses require the granularity necessary to apply the reg 4 exclusions and to evidence reg 6 proportionate reductions.

10. Audit and verification. Lessees and lessors should preserve source documents that prove how turnover was calculated and how excluded items were identified. This includes invoices, point-of-sale reports, delivery receipts, merchant-acquirer reports for card commissions, credit account statements, tax GST remittances, and records of refunds and write-offs.

11. Legal review before waiving statutory rights. If considering a written agreement to negate reg 5’s timing bar or to opt out of reg 6 protections, obtain legal advice about the effect of such waivers and whether further concessions or price adjustments are needed to preserve overall contractual balance.

12. Cross-check “statutory charge” entries. For any fee or charge that a lease requires the lessee to pay as a pass-through, confirm whether the fee qualifies as a statutory charge within reg 3, for example by checking whether non-payment creates a charge on land under the relevant Act.

Adopting these steps will align lease administration with the Regulations’ formal requirements. The central compliance tasks are precise accounting treatment of turnover, preserving written records of any agreement to alter the Regulations’ default operation, and following the timing rule for renegotiation.