The Retail Tenancy Reform Act covers many leases of premises in Victoria.
There are some exceptions but they are narrow.
The Retail Tenancy Reform Act defines a ‘retail premises’ as premises used
“wholly or predominantly for the carrying on of a business involving the sale or
hire of goods by retail or retail provision of services.
The Retail Tenancy Reform Act defines a “retail shopping centre” as“ a
cluster of premises five or more of which are retail premises and all of which
have, or if leased would have, a common head landlord, but does not include a
building with more than one storey except in relation to each storey of the
building on which is situated a cluster of premises in respect of which each of
the above criteria apply.
The Retail Tenancy Reform Act imposes numerous obligations on the landlord
before and during a lease. If the landlord fails to comply with the Act you may
be able to end the lease early or to claim compensation from the landlord. The
Act is long and detailed. Some of the important obligations on the landlord are:
1. At least 7 days before the lease is entered into the landlord must give
you a Disclosure Statement. A Disclosure Statement summarises the terms of the
lease. The form of Disclosure Statement must be substantially in accord with the
Disclosure Statement contained in the schedule.
2. Unless the landlord gives you the Disclosure Statement at least 7 days
before the lease is signed or you take occupation of the premises you may be
able to terminate the lease at any time until seven days after the landlord
supplies the Disclosure Statement. If the tenant is not given a copy of the
lease at least seven days before entering into the lease or the Disclosure
Statement contains false or misleading information the tenant may terminate the
lease within 28 days after receiving the lease and Disclosure Statement. If the
Disclosure Statement omits any important matters or is deficient in some way you
may be entitled to claim compensation from the landlord.
3. The landlord must give a copy of the lease signed by the landlord and the
tenant to the tenant within 28 days after the tenant has signed the lease.
Failure to do so entitles the tenant to terminate the lease within 42 days after
being given a copy of the lease or entering into the lease whichever is the
4. The tenant is entitled to a statutory option for a further term where the
initial term of the lease is less than five years provided that such option does
not exist where the tenant has previously held a retail tenancy or where the
landlord occupies the retail premises pursuant to a head lease which will expire
prior to the statutory option term.
There are a number of restrictions on rent reviews. For example:
A lease may not contain a clause which prevents the rent from going down eg
on a market review, or if the Consumer Price Index fell which would reduce the
rent below what was previously payable.
The landlord may not charge you the higher of 2 alternative methods of rent
review eg a review to the higher of market or CPI is illegal.
There are substantial obligations on the landlord if you are required to pay
outgoings under the lease. Generally, the landlord must provide you with an
estimate of outgoings in the Disclosure Statement before entering into the
lease. In some cases the landlord may even have to provide you with an auditor’s
statement for outgoings incurred by the landlord particularly in the case of a
retail shopping centre.
If you wish to assign the lease you must make application to the landlord who
must consider the request within 42 days. There are limited grounds on which the
landlord can refuse to assign. If any assignment of the lease proceeds, you and
any guarantors are not released from any future obligations in the lease for the
6 to 12 months before the end of the lease, if there is no option left, the
landlord must tell you whether he will grant you a new lease or require you to
vacate at the end of the lease. If the landlord fails to give you this notice
the lease will be extended to a date being 6 months after the required notice is
During an extension of the lease you may give 1 months notice to end the
The rights under the Retail Tenancy Reform Act are valuable and numerous.
Sometimes they will depend upon the circumstances of the lease or the terms of
The obligations mentioned here are not complete or exhaustive. If in doubt
you should consult a lawyer.
This Information Outline is provided courtesy of McKean & Park Lawyers &
Consultants who are experienced in this area of law. They are located at
405 Little Bourke Street MELBOURNE VIC 3000 or call them on (03) 9670
8822 if you would like more information on the legal topic, or you wish to
obtain formal advice regarding your situation.
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