The future direction of retail leasing legislation

By Sebastian Hartford Davis, PIPER ALDERMAN

The tension between encouraging competition in the market for retail leases and protecting small businesses has recently intensified. In November 2007, the Productivity Commission released a draft report concluding generally that the market was operating efficiently, but that a regulation was too prescriptive. Seemingly in spite of the Productivity Commission's report, the NSW government issued a discussion paper in April 2008, proposing a raft of new measures to strengthen consumer protection. The marked contrast in regulative philosophy between representatives of the State and Commonwealth Governments raises the possibility of federal regulation of retail leasing in the future. The benefits of uniform regulation, together with potential constitutional issues, are analysed in this article. The conclusion is that the federal regulation of retail leasing is both desirable and constitutionally feasible, so that the continued and effective operation of the retail leasing market (as a facet of the market for commercial leases more generally) is ensured.