The basic test
The Retail Leases Act 2003 (Vic) applies to a lease of retail premises. Premises are retail premises if, under the lease, they are used or to be used wholly or predominantly for:
- the retail sale or hire of goods;
- the retail provision of services; or
- a business the Minister has declared to be retail.
Shops are the obvious example, but the test can also catch service businesses that deal with the public, such as hairdressers, cafes and gyms. Any part of the premises intended as a residence is not counted. Whether particular premises qualify is a question of fact and law, and the answer depends on how the premises are used under the lease, not only on what the lease calls them.
The main exclusions
Even if the premises are used for retail, the Act does not apply where:
- the occupancy costs exceed $1 million a year, excluding GST (see below);
- the tenant is a listed corporation, or a subsidiary of one;
- the tenant is listed on certain overseas stock exchanges, or is a subsidiary of such a company;
- the tenant runs the business as the landlord’s employee or agent; or
- the premises, business, tenant or lease is excluded by a Ministerial determination.
The listed company exclusion depends on who the tenant is, not on how the premises are used.
Working out occupancy costs
Occupancy costs are the rent (not counting any rent based on turnover), plus the outgoings as estimated by the landlord, plus other prescribed costs, which include advertising and promotion costs such as marketing fund contributions. If the total is more than $1,000,000 a year, exclusive of GST, the Act does not apply.
Retail status is tested when the lease is entered into or renewed.
Short leases
Leases of less than one year are generally outside the Act, unless renewals or continued occupation give the tenant one year or more of continuous possession.
Ministerial exclusions
The Minister has excluded some categories by determination. The Victorian Small Business Commission lists them, and they include certain retail services premises that are not located entirely on the first three storeys of a building, some long leases of 15 years or more with substantial works obligations, and leases for community or charitable purposes. If one might apply, we check the determination itself.
What changes if the Act applies
The Act overrides inconsistent lease terms. The main protections for tenants include:
- the Small Business Commission’s information brochure when negotiations start, and a disclosure statement and the proposed lease at least 14 days before the lease is entered into (see disclosure statements);
- a minimum term of 5 years including options, unless the tenant obtains a waiver certificate from the Small Business Commission;
- limits on rent reviews, and a market review that can reduce the rent;
- outgoings only as specified in the lease, with estimates and annual statements;
- no land tax, commercial and industrial property tax, capital costs or depreciation passed on to the tenant;
- the landlord’s obligation to maintain the structure, fixtures, plant and equipment;
- a reminder from the landlord before an option deadline (see options to renew);
- limited grounds for refusing consent to an assignment, and release from liability in the right circumstances (see assigning the lease);
- mediation at the Small Business Commission before VCAT hears most disputes, with each party usually bearing its own costs (see lease disputes).
If the Act does not apply
Offices, warehouses and factories are often outside the Act, and so are larger retail leases over the occupancy cost threshold. Then the lease itself governs, together with the general law and the Property Law Act 1958 (Vic). For example:
- there is no statutory minimum term and no disclosure regime;
- land tax and other outgoings can be passed on if the lease says so;
- a landlord’s consent to an assignment is not to be unreasonably withheld, unless the lease expressly provides otherwise;
- before re-entering for a breach other than non-payment of rent, the landlord must serve a notice giving the tenant a chance to remedy it.
Because the lease carries more weight, the drafting matters more. See commercial lease review.
Not sure which applies?
Send us the lease, the use you intend and the rent and outgoings figures. We confirm whether the Act applies before you sign, because the answer changes what you can negotiate and what you can rely on.
Law referred to
- Retail Leases Act 2003 (Vic) ss 4 (retail premises and exclusions), 11(2), 15, 17, 21, 35, 50, 52, 60 to 61, 87 and 92.
- Retail Leases Regulations 2023 (Vic) reg 6 ($1,000,000 threshold).
- Property Law Act 1958 (Vic) ss 144 and 146.
This page is general information about Victorian law as at October 2026. It is not legal advice about your lease.
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