Commercial Tenancy (Retail Shops) Agreements Act 1985

The Commercial Tenancy (Retail Shops) Agreements Act 1985 (the Act) regulates retail and other commercial tenancies.

The following information is not a comprehensive statement of the laws or a substitute for expert opinion. It is vital however, that all parties to the leasing of relevant commercial premises such as tenants, property owners and commercial property managers are informed about these laws.

The Act regulates retail lease arrangements between landlords and tenants and outlines some of their rights and responsibilities in relation to their lease agreement.

The focus of the Act is on retail business; however leases for some non-retail use such as businesses in shopping centres and other specified businesses are also covered by the Act.

The Act covers parties involved in retail/commercial leases for shop premises:

up to but no greater than 1000 square metres in area;

tenanted by private businesses, but not public companies and their subsidiaries;

tenanted by some non-retail businesses if the premises are located in a shopping centre (of 5 or more retail shops or specified businesses); and

where the business carried out by the lessee is a specified business such as a dry cleaning, hairdressing, beauty therapy, shoe repair or video store.

The Act:

regulates commercial tenancy agreements in relation to retail shop leases;

provides for dispute resolution and the determination of questions arising under a lease by providing access to alternative lower cost mediation and dispute resolution mechanisms offered by the State Administrative Tribunal; and

prohibits unconscionable conduct in relation to retail shop leases.

The Act principally focuses on the need for transparency of information and fairness in the contract by:

requiring that the landlord provide a disclosure statement and tenant guide to the tenant;

establishing a consistent and fair process for rent reviews;

including special requirements regarding the payment of turnover or percentage rent;

giving the tenant an entitlement to a minimum lease period of up to 5 years;

regulating the distribution of specified landlord expenses (operating expenses) to tenants; and

providing that certain provisions in a lease are void – for example, a provision requiring the tenant to open during specified times.

Extended trading hours

As a result of recent changes to retail trading hours legislation, retail outlets are able to take advantage of extended trading hours. If a retail outlet chooses not to open for the extended hours, they are not required to contribute to operational expenses incurred by the landlord as a result of the shopping centre opening during those hours. The "Allocation of operating expenses for non-standard trading hours" information sheet provides more details.

The Act

Access to the Commercial Tenancy (Retail Shops) Agreements Act 1985, is available through the State Law Publisher's website