Retail leases are a type of commercial lease and in Victoria are governed by the Retail Leases Act 2003 which imposes certain restrictions and obligations to the lease as well as imposing extra duties to Landlords of retail premises. The Act applies to any premises from which goods and services are supplied to the general public. Retail leases entered into after 1 May 2003, including renewals of existing leases, are subject to the Act.
The legislation surrounding retail leases was put in place primarily to protect the tenant by imposing additional requirements on the landlord regarding the upkeep and maintenance of the premises and pre-lease disclosures. There are a multitude of obligations which landlords must take care to comply with. A failure to comply could result in claims of loss and damages from a tenant.
For the premises to be considered a retail premises, it must comply with section 4 of the Act. Section 4 is as follows:
(1) A premises, not including any area intended for use as a residence, that under the terms of the lease relating to the premises are used, or are to be used, wholly or predominantly for—
(a) the sale or hire of goods by retail or the retail provision of services; or
(b) the carrying on of a specified business or a specified kind of business that the Minister determines under section 5 is a business to which this paragraph applies.
Therefore the Act applies to a lease of premises used predominantly for the sale or supply of retail goods and services. Section 4 of the Act also contains a number of exemptions which should also be considered. A Landlord must provide the tenant with a disclosure statement prior to the commencement of the lease. This allows the tenant to make an informed decision about entering the lease. A disclosure statement must be in the form prescribed by the regulations and contains information relating to the property and premises itself.
When reading a disclosure statement for retail premises, you will be able to gain a greater understanding of the inclusions such as existing structures and fixtures (eg air conditioning, hot water service, telephone, water supply) and it will also describe the permitted use of the premises of which the tenant will be bound. The information provided in the disclosure statement must satisfy the requirements of the Act.
ASAP Lawyers regularly accepts instructions to draft retail leases and disclosure statements on behalf of landlord clients. We also review leases and disclosure statements for prospective tenants. We can make sure that you are fully aware of your rights and obligations and receive the right advice.
Contact us on 03 9450 9400 to arrange a consultation with one of our property lawyers.