What we help with / Business leases
Business leases in Victoria
For Polish owners of shops, cafes, workshops, offices and warehouses: what to check before you sign, and what the law gives you. This page covers Victorian leases only.
In short
- Whether the Retail Leases Act 2003 (Vic) protects you depends on how the lease says the premises are used. It covers premises used mainly to sell goods or services by retail.
- With a retail lease, you must receive the landlord’s disclosure statement and the full draft lease no later than 14 days before signing.
- A retail lease runs for at least five years, including options, unless the VSBC has issued you a waiver certificate. The landlord cannot pass land tax on to you.
- Retail lease disputes start with mediation at the Victorian Small Business Commission (VSBC). You need its certificate to go to VCAT, unless you need an urgent injunction.
- Cost and next step: we give you a written quote before work starts. Phone 1800 776 529 or write to us; we reply within one business day.
Retail or not, and why it matters
The Act covers premises the lease says are used mainly to sell or hire out goods, or provide services, by retail (s 4(1)). The VSBC says this can include selling to another business that is the end user. A shop or cafe will usually be covered; an office, workshop or warehouse needs a closer look at the lease.
The Act excludes premises with rent and outgoings over $1,000,000 a year before GST (s 4(2); Retail Leases Regulations 2023 (Vic) reg 6). It also excludes listed company tenants (s 4(2)(c)). A lease under one year is covered only once you have occupied for a continuous year (s 12).
Outside the Act, your rights depend mostly on the lease, so check it closely before signing.
Your main protections under a retail lease
- Disclosure: you must receive the disclosure statement and full draft lease 14 days or more before you sign. If late, the lease starts 14 days after you receive them (s 17(1), (1C)). If the statement is misleading or materially incomplete, you may terminate within 28 days (s 17(5), (6)).
- Five-year minimum: a shorter lease is extended to five years, counting options (s 21(1), (4)). The exception is where you ask the VSBC for a free waiver certificate and give the landlord a copy (s 21(5)).
- Outgoings: you pay only outgoings the lease specifies, after an itemised estimate (ss 39, 46). Capital costs, land tax, depreciation, sinking funds, the landlord’s interest and commercial and industrial property tax are excluded (ss 41 to 44, 50). Nor can the landlord charge you what its lawyer billed to prepare the lease (s 51).
- Options: the landlord must write to you at least three months before the last day to exercise an option to renew. The notice states that day and the first year’s rent, among other things (s 28(1A)). If it is late, your deadline moves to three months after the notice (s 28(2)).
Disputes go to the VSBC first
A retail tenancy dispute reaches VCAT only after the VSBC certifies in writing that mediation did not or will not resolve it. Injunctions are the exception (s 87). You may bring a lawyer to mediation (s 86(4)), and the VSBC provides a free interpreter if needed.
VCAT usually leaves each side to pay its own costs in these cases (s 92). A dispute only about rent is not a retail tenancy dispute (s 81(2)), and VCAT says non-retail disputes need no certificate either. We act for tenants and landlords in the VSBC and VCAT; for unpaid money generally, see Debts and disputes.
Before you sign a letter of offer
A letter of offer is often the first document you sign, so read it as if it binds you. Check:
- who the tenant is, you or your company, and whether directors must give a personal guarantee;
- the rent, its increases, the term and any options;
- the permitted use;
- the outgoings and the landlord’s estimate;
- who pays for the fit out and make good; under a retail lease, an undisclosed fit out contribution is void (s 20);
- the security deposit or bank guarantee; a cash deposit held under a retail lease must sit in an interest-bearing account (s 24).
Selling your business: assigning the lease
For a retail lease, the landlord can say no to an assignment only for reasons the Act lists (s 60). They include a buyer without enough money or business experience, or a buyer not given three years of business records. Ask in writing; if the landlord does not answer within 28 days, consent is taken to be given (s 61(2), (6)).
Give the landlord and the buyer an accurate, complete disclosure statement in the prescribed form. You and your guarantors are then released from the buyer’s obligations (ss 61(5A), 62). The landlord can recover its reasonable costs of the assignment (s 51(2)).
Questions
Have another question? Phone 1800 776 529 or send us a message.
For a retail lease without a VSBC waiver certificate, the term is extended to five years by law (s 21(4)).
Not under a retail lease; that part of the lease is void (s 50).
No. Your deadline moves to three months after the landlord gives you the required information (s 28(2)).
The VSBC provides a free interpreter if needed. Radek can also go through the matter with you in Polish before the mediation.
Law referred to
- Retail Leases Act 2003 (Vic) ss 4, 12, 17, 20, 21, 24, 28, 39, 41 to 44, 46, 50, 51, 60, 61, 62, 81, 86, 87, 92
- Retail Leases Regulations 2023 (Vic) reg 6
Radek Dajer is an Australian lawyer and notary public who speaks Polish. He practises Australian law and does not advise on Polish law; for questions of Polish law, we bring in a lawyer or notary in Poland.
Have a letter of offer, a lease or a landlord dispute?
Send it to us before you sign or reply, and we will respond within one business day.
Phone: 1800 776 529
Email: info@polishlawyer.com.au
Hours: Monday to Friday, 9 am to 5:30 pm
Office: 435 Nepean Highway, Frankston VIC 3199