How Do I Know if the Retail Leases Act Applies to My Shop?

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June 14, 2017

It’s sometimes tough for business owners to know whether the Retail Leases Act applies to their shopfront. Tenants have greater protections under retail leasing legislation, so it’s important to correctly identify whether this applies to your business. Factors such as location or lease term might exclude certain properties. Below, we break down the retail legislation in each state, when it applies as well as the exceptions to help you understand which laws apply to your business.

New South Wales

Legislation When Does it Apply? Exceptions
Retail Leases Act 1994 (NSW)
  • Applies to all retail shop leases entered into after 1 August 1994.
  • ‘Retail shop’ refers to sites used wholly or predominantly for the carrying on of a business listed in Schedule 1 of the Act. This can include bookshops, barbers and general stores.
  • A retail shop also includes any business located in a shopping centre.
  • Leases for a term of 6 months or less without any option to renew.
  • Leases for a term of 25 years or more, including an option to renew.
  • Shops with a floor space exceeding 1000 square metres.
  • Shops run by a landlord on a tenant’s behalf.
  • Shops where a principal business is leasing space to a secondary space (e.g. where a cinema leases part of its space to a stall selling t-shirts and the same party controls both businesses).
  • Sites in office towers that are part of a retail shopping centre.

Queensland

Legislation When Does it Apply? Exceptions
Retail Shop Leases Act 1994 (QLD)
  • Applies to all retail shop leases.
  • A retail shop means a premises that is:
    • located in a shopping centre; or
    • used wholly or predominantly to carry on a specific retail business.
  • Where the business operates as a service station franchise and the Competition and Consumer (Industry Codes—Oilcode) Regulation 2006 (Cth) applies.
  • If a tenant entered into the lease after 3 April 2006 and the term is less than six months (including any option to renew).
  • The definition of retail shop excludes the following:
    • sites greater than 1000 metres squared;
    • ad hoc or temporary sites (e.g. a stall at a cultural festival);
    • sites where the tenant acts as the landlord (e.g. the tenant is a member of a body corporate and acting as the landlord); and
    • sites within the South Bank area.

Victoria

Legislation When Does it Apply? Exceptions
The Retail Leases Act 2003
  • Applies to any lease of a retail premises entered into after 1 May 2003.
  • A retail premises has the primary purpose of providing retail goods and services.
  • Sites where rent and outgoings exceed a million dollars annually.
  • Sites operated by a tenant on behalf of their landlord.
  • Sites leased by a company listed on a major stock exchange.
  • Sites leased for a term less than one year.
  • Where the lease requires the tenant to carry out substantial works on the property or incur significant costs to improve the property; and the tenant can’t remove the works (or improvements) when they leave.
  • Sites located within the Melbourne markets.

South Australia

Legislation When Does it Apply? Exceptions
Retail and Commercial Leases Act 1995
  • Applies to all retail shop leases entered into after 30 June 1995.
  • A retail shop means a shop that:
    • sells goods to the public; or
    • provides services to the public.
  • A lease under the South Australian Act includes subleases, licences and informal agreements (both express and implied).
  • Sites where the annual rent is more than $400,000.
  • Sites where the lease is one month or less.
  • Sites where the tenants are banks, publicly listed companies (or their subsidiaries), insurance companies or the government.
  • Sites where the tenant and landlord are the same.

Tasmania

Legislation When Does it Apply? Exceptions
Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998
  • Applies to leases where the site is:
    • a retail premises; and
    • less than 1000 metres squared; and
    • parties entered into the lease on or after 1 September 1988.
  • A retail premises means any business located in a shopping centre or who is using the premises for a purpose described in the Regulations (e.g. flower shop or delicatessen).
  • A lease includes short-term and informal agreements.
  • Sites more than 1000 metres squared.
  • Sites run by a tenant on the landlord’s behalf.
  • Situations where the landlord and tenant are the same person. For instance, the owner of a cinema leases part of the space to run a stall selling movie merchandise.

Western Australia

Legislation When Does it Apply? Exceptions
Commercial Tenancy (Retail Shops) Agreements Act 1985
  • Applies to any lease of a retail premises entered into after 1 May 2003.
  • A retail premises is a premises with the primary purpose of providing retail goods and services.
  • Sites with an area of more than 1000 metres squared;
  • Sites lease by a publicly listed company.
  • Leases exclusively for the operation of an ATM or vending machine.

Australian Capital Territory

Legislation When Does it Apply? Exceptions
Leases (Commercial and Retail)
Act 2001
  • Applies to all retail shop leases entered into after 1 January 2013.
  • A retail shop means any business in a retail shopping centre or any business that is wholly or predominantly a retail business.
  • Premises with floor space of more than 1000 square metres.
  • Premises leased by a publicly listed company or a subsidiary.

Northern Territory

Legislation When Does it Apply? Exceptions
Business Tenancies (Fair Dealings) Act 2003
  • Applies to all retail shop leases entered into after the 1 of July 2004.
  • A lease includes licences, occupancy agreements and other forms of non-exclusive occupation as well as implied agreements and oral agreements.
  • A retail shop means any business carried on in a shopping centre or any premises used to provide or sell services or goods.
  • Sites with floorspace of more than 1000 metres squared.
  • Sites operated by a tenant on behalf of a landlord.
  • Shops where the main business leases space to another business.
  • Sites where the tenant is a publicly listed company.
  • Leases with a term of 6 months or less with no option to renew.
  • Leases with a term of more than 25 years (including an option to renew).
  • A lease held over by a tenant after the initial term expires.

 

Key Takeaways

Although the legislation is state-specific, a retail lease will typically apply if the business:

  • is located in a shopping centre or the business’ primary function is to provide retail goods or services;
  • has a lease term of more than one month (and in some states, six months); and
  • is operated by a tenant who is not a publicly listed company and is not carrying on business activities on the landlord’s behalf.
It’s important to know whether the retail leasing legislation in your state applies to your business so you can identify your rights and obligations, as well as your landlord’s.
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If you have any questions or need help determining whether a retail lease applies, get in touch with our commercial leasing team on 1300 544 755.
Vee Naidoo

About Vee Naidoo

(Read all articles by Vee)
Vee Naidoo is a final year law student at the Australian National University. She is interested in intellectual property), commercial leasing and competition law, particularly as it intersects with the Arts. Vee draws on her experience as an editor, author, journalist and salesperson to provide clients with practical and accessible advice.
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