The 5 year minimum lease term in Victoria and the waiver certificate
A Victorian retail lease, including options, must run for at least 5 years unless the tenant waives that right through the Small Business Commission. This is how the rule works, when it does not apply, and how a waiver is done properly.
The rule
Under s 21 of the Retail Leases Act 2003 (Vic), the term of a retail premises lease, including any further term under an option for the tenant to renew, must be at least 5 years. So a 3 year lease with a 2 year option complies, and so does a 1 year lease with four 1 year options. The options count whether or not the tenant exercises them.
Only options in the lease when it is entered into count. An option granted later is disregarded in working out whether the lease meets the minimum. For the Act’s other rules, see our guide to the Retail Leases Act 2003 (Vic).
The rule applies only to retail leases. A lease of an office, warehouse or factory that is outside the Act has no statutory minimum term, and the parties can agree any term. If you are not sure which kind of lease you have, see does the Retail Leases Act apply to my lease and warehouses, offices and retail leases.
When the minimum does not apply
- Short leases. A lease for less than one year is generally outside the Act altogether, unless renewals or continued occupation give the tenant one year or more of continuous possession.
- Renewals. The minimum does not apply to the renewal of a lease where there is no break in the tenant’s possession.
- A short head lease. If the landlord itself holds the premises under a head lease with 5 years or less to run, the minimum is the remaining term of the head lease less one day.
- A waiver certificate. The tenant can waive the minimum by obtaining a certificate from the Victorian Small Business Commission, explained below.
If the lease is shorter than 5 years
A retail lease that breaches the minimum, without a valid waiver, is not invalid. Its term is extended so that it complies. If the lease does not provide for a rent review for the extended period, the Act provides for a market rent review. A landlord who agreed to a 2 year lease, intending to redevelop, can therefore find itself bound for 5 years and, if the lease is silent, facing a market review for the extra period.
A landlord who needs vacant possession for a genuine redevelopment has other tools, including the relocation and demolition provisions of the Act, which carry their own notice and compensation rules. See relocation and demolition.
The waiver certificate
The only way to waive the minimum term is through the Small Business Commission. There is no option under the current Act for a lawyer to certify the waiver instead. The process is:
- The tenant, or prospective tenant, asks the Commission for a certificate.
- The Commission certifies in writing that it, or someone acting on its behalf, has explained the effect of the minimum term rule.
- The tenant gives the landlord a copy of the certificate.
The Commission uses an online application form. It asks for the proposed length of the lease and the reason for a shorter term, with options such as a planned demolition or redevelopment, testing the business, or being unsure of future needs. It also asks for the premises address, the tenant’s details and the landlord’s name. The certificate is free, and the Commission’s page says it is issued automatically and sent to the tenant’s email address.
The Act requires the Commission to consider a request made before the lease is entered into or within 90 days after, and it may consider a request made at another time. It must issue the certificate within 21 days after the request, but a certificate issued late is still valid.
Getting the timing and paperwork right
For tenants:
- apply only if you genuinely want a shorter term, and understand that you are giving up a right to stay for 5 years;
- apply before you sign if you can, and keep a copy of the certificate with the lease; and
- give the landlord a copy of the certificate, because the waiver depends on it.
For landlords:
- do not rely on a short term until you hold a copy of the certificate;
- check that the certificate names the right tenant and premises, and keep it with the lease; and
- remember that the other retail lease obligations, such as the disclosure statement at least 14 days before the lease is entered into, still apply to a retail lease shorter than 5 years. See preparing a lease.
Pressure to waive: unconscionable conduct
A landlord may ask a prospective tenant to obtain a waiver certificate, and the Commission’s page contemplates that. But the Act prohibits landlords and tenants from engaging in unconscionable conduct in connection with a lease or proposed lease, and one of the factors it lists for deciding whether conduct is unconscionable is pressure on the tenant to accept a term of less than the 5 year minimum. A tenant who has suffered loss because of unconscionable conduct may claim at VCAT. If you feel you are being pushed to waive, get advice before you apply.
How we help
- A free 15-minute phone call about whether a short term suits you, and what you would be giving up.
- Reviewing a short retail lease before you sign, including the waiver and the option terms. A lease review costs $1,100 including GST ($1,000 + GST) for most leases. See commercial lease review.
- For landlords: short-term leases, waiver steps and redevelopment clauses that work together.
- Advice where a lease shorter than 5 years was signed without a waiver.
Common questions
Can’t see your question? Call 1800 776 529 or send us a message.
For retail leases, yes. The term, including options, must be at least 5 years unless the tenant obtains a waiver certificate from the Victorian Small Business Commission and gives a copy to the landlord. Leases outside the Retail Leases Act have no minimum term.
Yes. Options in the lease when it is entered into count towards the 5 years, whether or not the tenant exercises them.
Apply to the Victorian Small Business Commission using its online form. The certificate is free and is emailed to the tenant. Give the landlord a copy, ideally before you sign.
The lease is still valid, but its term is extended to 5 years. If the lease has no rent review for the extended period, the Act provides for a market review.
A landlord can ask, and a tenant can refuse. Pressure on a tenant to accept less than the 5 year minimum is one of the factors the Act lists in deciding whether conduct is unconscionable.
Law referred to
- Retail Leases Act 2003 (Vic) ss 12, 17, 21, 55, 56 and 76 to 80, including s 77(2)(d)(ii).
- Victorian Small Business Commission, ‘Five-Year Waiver Certificates’ (Web Page, 10 November 2022).
Last reviewed: October 2026, by a Victorian solicitor with a current practising certificate. This page is general information about Victorian law as at October 2026. It is not legal advice about your lease.
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