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In Victoria, retail tenancies are governed by the Retail Leases Act 2003. (the Act)

The Act creates certain rights and responsibilities for tenants and landlords in Victoria which aim to encourage fairness, equality and transparency in Lease dealings.

Victorian Retail Tenancy Laws

Most retail shop premises will come under the Act, but there are some exceptions.
Generally, premises used for the sale or hire of goods or services to the public will be subject to the Act.

Exceptions include premises used for the purpose of wholesaling, manufacturing or storage.  A Commercial Lease may be more suitable in these instances, and the transaction will not be regulated by the Act.

Fairness and transparency

The Act seeks to balance the rights of the landlord with those of the tenant.
It specifically prohibits conduct that is unconscionable and promotes practices which provide the tenant with a degree of transparency and equality, tenants being generally viewed as being the less powerful party in most Lease transactions.  This results in greater obligations and responsibility being placed on the landlord.

A failure or omission of the landlord to provide sufficient information is not acceptable and tough penalties may apply.

Landlord’s obligations once lease negotiations begin

The landlord’s obligations start as soon as negotiations with a prospective tenant begin.

The landlord is required to provide a prospective tenant with the following documents, as soon as negotiations are entered into:-

  • a copy of the proposed Lease;
  • a Disclosure Statement (at least 7 days before entering into the Lease);
  • The Tenant’s Guide (at least 7 days before the Lease is entered into).

The effect of this is that a landlord cannot sign a tenant up on the spot.  A 7 day minimum period is provided to the tenant to enable them to conduct their due diligence, fully consider the Lease and seek professional advice if necessary.

Further, a landlord needs to give the tenant a fully signed copy of the Lease once finalised and signed by all parties.

5 year minimum term

Tenants are given a minimum 5 year lease term in Victoria, as is the case in most other Australian states and territories.  You will need the permission of the Small Business Commissioner if you want a shorter lease term.

Landlord cannot recover Lease preparation costs

The Act prevents landlords from asking the tenant to pay the costs of preparing the Lease and associated documentation.

Fortunately, RP Emery and Associates offers landlords an easy and cost effective Lease preparation package, allowing landlords to create and implement their own professionally drafted and legally compliant retail Lease

The kit gives you all the tools you need combined with a clear course of action that will lead you out of the Retail Tenancy minefield.

To read more about our DIY Retail Tenancy Leasing Kits click here.

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