Advice on forced relocation

Most Retail Leases provide for a landlord to be able to re-locate a tenant in the event of a re-development of the Centre. This is particularly true in shopping centres. The Act sets out certain time frames which must be adhered to and what expenses the landlord must pay to the tenant for the re-location.

In a recent case, Retail Lease Solutions represented a tenant in a shopping centre in the Upper North Coast. The tenant was asked to re-locate to another part of the centre which it was claimed by centre management would be better than the location they were currently in. The re-location took place as part of an overall re-development of the centre. The management paid for their re-fit and gave them a rent free period. The pedestrian traffic was substantially less than their original location and because of construction noise and shops being hoarded up opposite, their business failed within 12 months. They sought mediation before the RTU. The matter was settled for a cash payment to the tenant who also did not have to make good the premises. This was notwithstanding the fact that the tenant knew about the re-location well in advance and knew about the centre’s re-development.