Retail Leases Act 2003 (Vic) explained
The Retail Leases Act 2003 (Vic) is the Victorian law that governs leases of retail premises. It applies where premises are used wholly or mainly to sell or hire goods, or provide services, to the public. It sets rules the lease can’t override, including a disclosure statement before signing, a five-year minimum term and limits on what the landlord can pass on to the tenant.
Which leases the Act covers
The Act applies to a retail premises lease. Retail premises are premises used wholly or mainly for the sale or hire of goods by retail, or the retail provision of services. Shops, cafes, restaurants, hairdressers and many service businesses are covered.
Some leases are excluded even if the use is retail. The main exclusions are:
- leases where the tenant’s occupancy costs are more than $1 million a year
- leases where the tenant is a listed public company or its subsidiary
Occupancy costs include rent and outgoings. If you’re not sure whether your lease is retail, see commercial lease vs retail lease.
Rules before the lease is signed
| Rule | What it means |
|---|---|
| Disclosure statement | The landlord must give the tenant a disclosure statement and a copy of the proposed lease at least 14 days before the lease is entered into. |
| Minimum term | The lease, including options, must give the tenant at least five years, unless the tenant gets a waiver certificate from the Victorian Small Business Commission and gives the landlord a copy. |
| Landlord’s legal costs | The landlord generally can’t charge the tenant for the landlord’s legal costs of preparing the lease. |
| Key money | The landlord can’t ask for a payment just for granting the lease. |
See the 14-day disclosure period in Victoria and retail lease minimum term in Victoria for how the first two rules work.
Rules during the lease
The Act also controls what the landlord can charge and how the lease runs.
- Land tax. The landlord can’t recover land tax from the tenant as an outgoing.
- Outgoings. The tenant only pays the outgoings the lease sets out. The landlord must give an estimate in advance and a statement of what was actually spent.
- Rent reviews. A clause that stops the rent going down on a market review has no effect. If a market review is disputed, a valuer can be appointed to decide it.
- Repairs. The landlord is responsible for maintaining the structure of the premises and the landlord’s plant and equipment, other than damage the tenant causes.
- Assignment. The landlord can only refuse consent to an assignment on the grounds the Act allows, and must deal with a request within the time the Act sets.
- Interference with trading. If the landlord’s actions substantially disrupt the tenant’s business, the tenant may be entitled to compensation.
These rules apply even if the lease says something different. A lease prepared for another state, or an older template, often doesn’t reflect them.
Signing or offering a retail lease in Victoria? We act for landlords and tenants under the Act, online. Retail leases in Victoria.
How disputes are handled
Retail lease disputes in Victoria usually start with the Victorian Small Business Commission (VSBC). The VSBC offers mediation, where both sides try to settle the dispute with a neutral mediator.
If mediation doesn’t resolve the dispute, it can go to the Victorian Civil and Administrative Tribunal (VCAT). In most cases VCAT will only hear a retail lease dispute after the VSBC has certified that mediation failed or wasn’t appropriate.
Disputes about rent, outgoings, repairs, make good, assignment and the landlord’s conduct usually follow this path.
Terms used in Victoria
The Victorian Act uses “landlord” and “tenant”, where the Queensland and New South Wales Acts use “lessor” and “lessee”. The idea is the same. If you lease premises in more than one state, the rules differ in detail, including the disclosure period and the minimum term.
What this means if you’re about to sign
If you’re a tenant, check you have the disclosure statement and that the period has passed before you sign. Read the statement against the lease, and check the term meets the five-year minimum or that you understand why it doesn’t.
If you’re a landlord, give the disclosure statement and lease early, keep a record of when they were given, and, if the term is under five years, ask the tenant for a copy of the VSBC waiver certificate, ideally before signing. Use a lease that reflects the Victorian Act, not a general template.
Questions
Something else? Enquire online or email us.
Can the lease say the Act doesn't apply?
No. If the premises are retail premises under the Act, it applies whatever the lease says, and terms that conflict with it generally have no effect.
Does the Act apply to an office?
Only if the premises are used wholly or mainly to sell or hire goods, or provide services, to the public. A typical back office isn't retail premises.
Who handles retail lease disputes in Victoria?
Most disputes go to mediation through the Victorian Small Business Commission first. If that doesn't resolve them, they can go to the Victorian Civil and Administrative Tribunal (VCAT).
Leasing retail premises in Victoria?
We act for landlords and tenants under the Retail Leases Act 2003, online and on fixed fees. Send us your lease and tell us where you are up to.
General information only, not legal advice. Every lease is different, so get advice on yours before you sign.