Each Australian state and territory has Retail Leases Act legislation that provides specific protections for small retail tenants.
These laws recognise the imbalance in bargaining power between landlords and retail tenants and impose mandatory obligations on landlords.
Understanding your rights under these Acts is essential before signing any retail shop lease.
Overview of Retail Leases Legislation
Retail Leases Acts exist in all states and territories, though the specific provisions and names vary.
The key principle across all jurisdictions is that the Act applies automatically to retail premises leases—parties cannot contract out of its protections.
In Victoria, the Retail Leases Act 2003 applies to most retail premises leases.
In NSW, the Retail Leases Act 1994 applies, while Queensland uses the Retail Shop Leases Act 1994.
The ACT has the Leases (Commercial and Retail) Act 2001, and Western Australia has the Commercial Tenancy (Retail Shops) Agreements Act 1985.
South Australia uses the Retail and Commercial Leases Act 1995, Tasmania the Fair Trading (Code of Practice for Retail Tenancies) Regulations 2018, and the Northern Territory the Business Tenancies (Fair Dealings) Act 2003 [citation:7][citation:8].
Critical: The Act applies based on the nature of the premises and the tenant's business, regardless of what the lease says. A clause stating "the Retail Leases Act does not apply to this lease" is void under section 94 of the Victorian Act and equivalent provisions in other states. The court looks at the reality of the situation, not the wording [citation:8].
Key Tenant Rights Under the Retail Leases Act
1. Mandatory Disclosure Requirements
Before signing a retail shop lease, the landlord must provide a disclosure statement containing specific prescribed information.
This must be given at least 7 days before the lease is entered into (varies slightly by state).
The disclosure statement must include: the amount of rent and how it is calculated; any proposed rent increases and review mechanisms; outgoings that the tenant is liable to pay; the amount of any security deposit or bank guarantee; the permitted use of the premises; details of any franchise arrangements; and any other material information affecting the lease.
If the landlord fails to provide proper disclosure, the tenant has rights to terminate the lease or claim compensation.
The disclosure statement becomes part of the lease [citation:7].
2. Minimum Lease Terms
Under most Retail Leases Acts, the minimum lease term for retail premises is 5 years (including any option periods).
The tenant can agree to a shorter term if they genuinely request it in writing, but the landlord cannot insist on a term shorter than 5 years.
This protection ensures retail tenants have sufficient security of tenure to establish and grow their businesses without fear of frequent relocation.
When negotiating your lease, you are entitled to a minimum of 5 years unless you voluntarily agree to less [citation:7].
3. Rent Review Protections
The Act provides protections regarding how rent can be reviewed and increased. Landlords cannot increase rent more than once in any 12-month period unless a different interval is specified in the lease and agreed by the tenant.
If the lease provides for market rent reviews, the landlord must provide a valuation from a qualified valuer.
The tenant can dispute the valuation through the relevant tribunal. Some states prohibit 'ratchet clauses' that prevent rent from decreasing even if market rents fall—rent must reflect current market conditions.
Rent cannot be increased during any rent-free period provided as an incentive. The Act also provides procedures for rent disputes that are faster and less expensive than court proceedings [citation:7].
4. Outgoings Limitations
The Act restricts what outgoings landlords can recover from retail tenants. Landlords cannot charge tenants for capital improvements, depreciation, interest on borrowings, the landlord's own management costs (unless specified), costs of remedying the landlord's default, expenses relating to leased premises that are not yet constructed, and any outgoings not directly attributable to the premises.
Outgoings must be calculated fairly—typically based on floor area proportion. Landlords must provide an annual outgoings statement audited by a qualified accountant, and tenants have rights to inspect supporting records.
Any increase in outgoings from the estimate provided in the disclosure statement is not recoverable unless it is for a new or increased tax or charge imposed by government [citation:7].
5. Assignment and Subletting Rights
If you wish to sell your business or transfer your lease to another party, the Act provides protections.
Landlords cannot unreasonably withhold consent to assignment of a retail shop lease. The landlord has 28 days to respond to a written request for consent; if they do not respond within that time, consent is deemed to be given.
The landlord cannot charge an unreasonable fee for considering the assignment (only actual reasonable costs, not a percentage of rent or premium).
If the landlord consents to assignment, the outgoing tenant may be released from future liability under the lease if the landlord consents to that release.
The landlord cannot require the outgoing tenant to remain liable as a guarantor.
These provisions make it easier to sell your retail business without being trapped by a restrictive lease [citation:7].
6. Make Good Limitations
While make good clauses can still apply to retail leases, the Act provides some protections.
The landlord cannot require the tenant to remove any fit-out or improvement that the landlord consented to, unless the lease explicitly provides for removal and the removal does not cause structural damage.
The tenant is not required to reinstate the premises to a better condition than the condition required by the lease.
If the lease does not specify the condition to which the premises must be returned, the standard is 'reasonable condition considering the age and character of the premises.' The tenant cannot be required to remove any building or structure that the landlord requested or consented to be built [citation:7].
7. Dispute Resolution Access
If a dispute arises under a retail lease, the parties have access to specialist dispute resolution processes.
Most states provide for mediation or conciliation through the relevant government department. If mediation fails, the matter can be referred to the state's civil and administrative tribunal (VCAT in Victoria, NCAT in NSW, QCAT in Queensland).
The tribunal can make binding orders including orders for compensation, variation of the lease, or declarations of rights.
Tribunal processes are designed to be faster, less formal, and less expensive than court proceedings.
Legal representation may be permitted but is not required. This access to affordable dispute resolution is a key protection for small retail tenants who cannot afford lengthy court battles [citation:8].
8. Prohibition on Contracting Out
Section 94 of the Victorian Retail Leases Act 2003 (and equivalent provisions in other states) explicitly provides that any agreement or arrangement that purports to exclude, modify, or restrict the operation of the Act is void.
This means landlords cannot include clauses that try to bypass the Act's protections.
In Lake Fyans Recreational Area Committee of Management Inc v Halski Pty Ltd & Anor [2025] VCC 1506, the court confirmed that this prohibition applies even if the lease includes an acknowledgment that the Act does not apply.
The court looks at the actual obligations under the lease, not clever drafting.
This provision is the cornerstone of retail tenant protection—you cannot be forced to give up your statutory rights as a condition of getting the lease [citation:8].
9. Cooling-Off Period
In some states, retail shop leases include a statutory cooling-off period. For example, in NSW, the tenant has 7 days after the lease is entered into to rescind the lease by written notice to the landlord.
The cooling-off period allows you to change your mind or obtain legal advice after signing.
If you rescind during the cooling-off period, you may be liable for a small penalty (e.g., 1% of the total rent payable for the first year).
Check your state's specific cooling-off provisions.
Exceptions to Retail Leases Act Coverage
Not all retail premises leases are covered. Typical exceptions include [citation:8]: leases for premises over a certain size (e.g., over 1,000 square metres in some states); leases with a term of 15 years or longer that impose genuine obligations on the tenant to carry out substantial work; leases in certain types of shopping centres (varies by state); premises used primarily for carrying on a business that is not a retail business (e.g., wholesale, industrial); and leases where the tenant is a listed corporation or subsidiary of a listed corporation.
If you are uncertain whether the Act applies to your lease, seek legal advice.
Practical Steps to Protect Your Rights
Before signing any retail shop lease, do not sign until you have received and reviewed the disclosure statement.
If the landlord has not provided disclosure at least 7 days before signing, you may have rights to terminate or claim compensation.
Ensure the lease complies with the minimum 5-year term requirement unless you have genuinely requested a shorter term.
If a dispute arises, use the tribunal system—it is designed to be accessible to small tenants.
Document everything in writing, including requests for consent to assign, maintenance issues, and outgoings disputes [citation:7].
Final advice: Retail Leases Acts provide powerful protections, but they only work if you know your rights. If your landlord asks you to sign a lease that includes clauses contrary to the Act (e.g., shorter than 5 years, unreasonable make good, no assignment rights), politely point out that those clauses are void. If the landlord persists, seek legal advice—and consider whether you want to enter into a lease with a landlord who disregards basic statutory obligations.