Retail commercial leasing in Victoria is covered by the Retail Leases Act 2003. The Act provides for minimum standards which must be followed in commercial leasing relationships.
Here is LegalVision’s guide to help you understand the key parts to this Act.
Who is covered by the Retail Leases Act?
Not everyone. The Act only covers businesses that are used mainly for the hire or sale of goods in the retail sector and where the cost of occupancy is less than $1 million a year.
The legislation does not apply to:
- Storage, manufacturing and wholesaling businesses.
- Listed corporations or subsidiaries of corporations.
- Leases for less than a year.
What does a landlord have to do before entering a new commercial retail lease?
Before entering into a new lease:
- The landlord must give the tenant a copy of both the lease and the Victorian Small Business Commissioner information
- The lease has to be in writing
- The landlord is required to provide the tenant with a copy of a disclosure statement at least seven days prior to the lease commencing
- If the disclosure statement is not given, then the tenant can withhold rent until it is given
What is the minimum term for a commercial retail lease in Victoria?
The minimum term is five years.
The rate of rent is to be determined by negotiation, rent is not specifically regulated by legislation. Most leases will contain clauses providing for rent reviews to be determined on market rates. Under Victorian law, market rent rates should have regard to the following matters:
- The other provisions in the lease.
- The rent rates which would likely be offered to new tenants.
- The landlord’s outgoings.
- Rent concessions.
Can I claim compensation from my landlord in a commercial lease?
Yes, but only under limited circumstances. You can claim compensation from a landlord in Victoria for loss or damage if:
- The landlord had restricted your access to the premises
- The landlord has caused disruption to your business
- The landlord has failed to rectify damage to your premises
How do I get compensation from my landlord?
In Victoria you can contact the Victorian Small Business Commissioner or you can contact a leasing lawyer if you want further help or representation.
Can a landlord force me to move?
Only if there is a ‘relocation clause’ in the lease, otherwise no.
When do changes to a lease become a new lease?
This is a complex question and you may wish to speak to a leasing lawyer to get further information and advice. Really this depends on the type and extent of the changes to the lease. If the lease is substantially changed then this can be considered a new lease – so if you want to make significant variations to your lease, but don’t want to create a new one you should really get legal advice. Note that if you create a new lease, the landlord will be required to provide you with another disclosure statement.
Can I be prevented from assigning my retail lease?
The short answer is no – however, you must follow procedure as outlined in Victorian law if you want to assign your lease to somebody else.
You need to:
- Get your landlord’s consent to assign the lease (which consent needs to be in writing)
- Give as much detail you can to the landlord about the new tenant
- Give the new tenant a disclosure statement and let them know about significant changes in circumstances since you received the disclosure statement
To get quality legal advice from a leasing law specialist, contact LegalVision on 1300 544 755.
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