Retail Shop Leases Act 1994 (Qld) explained

The Retail Shop Leases Act 1994 (Qld) is the Queensland law that governs retail shop leases. It applies to premises used mainly for a retail business, or located in a retail shopping centre, and it sets rules the lease can’t override. If your lease is covered, the Act affects what happens before you sign, during the lease and when there is a dispute.

Which leases the Act covers

The Act applies to a retail shop lease. A retail shop is premises that are:

• used wholly or mainly for a retail business listed in the Retail Shop Leases Regulation, or
• located in a retail shopping centre.

The list of retail businesses is broad. It covers most shops selling goods to the public, food and drink outlets, and many personal services, such as hairdressers.

Some leases are excluded even if the business is retail. The main exclusions in section 5A are premises with a floor area of more than 1,000 m², theme and amusement parks, flea and arts and crafts markets, and temporary stalls at shows or festivals. If you’re not sure whether your lease is retail, see commercial lease vs retail lease.

The Act uses “lessor” for the landlord and “lessee” for the tenant. This guide does the same.

What the Act requires before the lease is signed

The Act sets out steps both sides must take before a retail shop lease is entered into. The advice reports are also needed before an assignment of the lease.

The disclosure statement tells the lessee the key facts about the premises and the costs of occupying them, including rent, outgoings and any works. See the 7-day disclosure period in QLD for the timing, and Form 11 vs Form 12 for the two advice reports.

The reports aren’t needed from a lessee of 5 or more retail shops in Australia (a “major lessee”), or from a franchisee occupying the shop under a licence from the franchisor, who holds the lease. A franchisee who signs the lease, takes a sublease or takes an assignment still needs both reports. Part 5 of the Act, which contains these steps, also doesn’t apply to leases of 6 months or less or to periodic tenancies.

If the lessor doesn’t give the disclosure statement on time, or it is materially false, misleading or incomplete, the lessee can end the lease by written notice within 6 months after entering it (section 21F). For a wrong statement, the right doesn’t apply if the lessor acted honestly and reasonably and the lessee is in substantially as good a position as if the statement had been right.

Rules that apply during the lease

The Act also controls what the lease can say and how the lessor deals with the lessee while the lease runs. The main areas are:

• Rent reviews. A lease can’t stop the rent from going down on a market review. If the parties can’t agree on market rent, a valuer can be appointed to decide it.
• Outgoings. The lessee only pays outgoings the lease specifies, including how they are worked out and shared (section 37). The lessee’s share can’t exceed its shop’s share of the lettable area that benefits (section 38). Outgoings should match what was disclosed; if they don’t, the lessee may have rights. The lessor must give estimates and an annual statement of what was spent.
• Lessor’s legal costs. The lessor generally can’t charge the lessee for the lessor’s legal costs of preparing or negotiating the lease.
• Assignment. The outgoing lessee must give the buyer an assignor disclosure statement. If the lessor doesn’t answer a request for consent within 1 month of getting full particulars, or imposes unreasonable conditions, the lessee can bring a dispute (section 50). The Property Law Act 2023 (Qld) also says consent can’t be unreasonably withheld.
• Interference with trading. If the lessor’s actions substantially disrupt the lessee’s business, the lessee may be entitled to compensation.

These rules apply even if the lease says something different.

Signing or offering a retail shop lease in Queensland? We act for lessors and lessees under the Act, online. Retail shop leases in Queensland.

How disputes are handled

Retail tenancy disputes in Queensland usually start with a notice of dispute lodged with the Queensland Small Business Commissioner (QSBC). The QSBC arranges mediation, where both sides try to reach an agreement with a neutral mediator.

If mediation doesn’t resolve the dispute, either party can take it to the Queensland Civil and Administrative Tribunal (QCAT). QCAT can make orders about the lease, including orders for payment of money.

Most disputes about rent, outgoings, make good, assignment and the lessor’s conduct follow this path. A court is usually not the first step.

What this means if you’re about to sign

If you’re a lessee, read the disclosure statement against the lease. Check that the rent, outgoings and works match. Get both advice reports well before you plan to sign, not on the day.

If you’re a lessor, give the disclosure statement and proposed lease early, keep a record of when they were given, and ask for the lessee’s Form 11 and Form 12 before you sign.

In both cases, check the current forms on the QSBC website. The approved forms change from time to time, and an old version can cause problems later.