Unlike retail legislation in other States, the Retail Leases Act 2003 (VIC) (“the Act”) does not prescribe a checklist of premises that it considers to be retail. Instead, the Act provides a broad definition of what constitutes a retail premises and the rest is up to interpretation.

Section 4 of the Act defines a retail premises as one that under the terms of lease is used entirely or predominantly for:

  1. The sale or hire of goods by retail or the retail provisions of services; or
  2. The carrying on of a specified business or a specified kind of business that the Minister determines under section 5 is a business which this paragraph applies.

Ministerial Determinations

To date, there are seven Ministerial Determinations, the effect of which to exclude a retail premises lease from the operation of the Act. The Ministerial Determinations are:

  1. Premises located in a multi-story building (other than those located on the first three floors) and used for the retail provision of services are not considered retail premises. The first three floors of the building are calculated from the ground floor, first floor and second floor with the third floor excluded from the operation of the Act.
  2. The Act does not govern premises used for a Barrister’s Chambers Limited.
  3. The Act excludes leases that have a term of fifteen years or more.
  4. Melbourne Market Authority Leases are excluded.
  5. Municipal Council Leases for certain community and charitable purposes are excluded.
  6. New Zealand Stock Exchange listed corporations are excluded.
  7. Charitable and community purposes leases are excluded (this is the most recent determination coming into effect on 1 January 2015).

Multi-Story Building Exclusion

The rationale behind the multi-story building exclusion seems to be that premises above the third floor of a building are typically commercial offices with little foot traffic.

Interestingly, in other States such as New South Wales and Queensland, these premises would not have been protected by the respective retail legislation unless located in a shopping centre. It is therefore entirely possible for an accounting firm to be located on the second floor of a building in Victoria and attract the Act’s protection. But for its Sydney based office, also located on the second floor, its lease will not receive the same retail legislation protections.

Key Takeaways

As the above demonstrates, understanding the difference between a retail and a non-retail lease is not always a straightforward exercise. Many relevant factors come into play including the size of the premises, the location of the premises (and sometimes, on what floor!) may make a difference to receiving protection under the retail legislation. If you would like to find out more or need assistance in reviewing your lease document, get in touch with our experienced leasing team on 1300 544 755.

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