Does the Retail Leases Act apply to a 15 year lease?
A long lease is not automatically outside the Act. A Ministerial determination excludes some leases of 15 years or more, but only where the lease also imposes specific works obligations, and the Court of Appeal is due to hear an appeal about it on 10 November 2026.
The 15 year determination
The Retail Leases Act 2003 (Vic) lets the Minister determine that particular premises, businesses, tenants or leases are not retail premises. A determination published in the Victoria Government Gazette No S 184 on 23 August 2004, which took effect the next day, uses that power for some long leases. It has two parts, and a lease must satisfy both.
The term. The lease must be for a term of 15 years or longer, not counting any options to renew. The determination also covers a shorter lease granted by renewal of such a lease, and a shorter lease granted by variation of one on substantially the same terms.
The works provisions. The lease must also contain a provision that does at least one of these things:
- obliges the tenant or another person to carry out substantial work of building, installation, repair or maintenance on the structure or fixtures, the plant or equipment, or the fittings and fixtures for services such as gas, electricity, water and drainage;
- obliges the tenant or another person to pay a substantial amount towards the cost of that work; or
- in any significant respect disentitles the tenant or another person from removing those things at or after the end of the lease.
It applies only to leases, including renewals, entered into on or after 24 August 2004. If it applies, the Act does not, so the landlord can pass on land tax if the lease says so, and the disclosure, minimum term and outgoings rules do not apply. The basic test and the other exclusions are in does the Retail Leases Act apply to my lease.
Counting the 15 years
Options do not count. A 10 year lease with a 10 year option is not a lease of 15 years or more for the determination, however long the tenant may end up staying.
A break clause can also matter. VCAT has held that a lease giving the tenant a right to end it during the term without any default by the landlord was not, in substance, a lease for a term of 15 years, so the determination did not apply. Any other reading would let parties avoid the Act with a lease that does not really bind the tenant for 15 years. A landlord who wants to rely on the determination should think carefully before agreeing to a no-fault break right.
VCAT has also said that whether the determination applies is decided as at the date the lease is entered into.
One works provision is enough
The three works provisions are alternatives. The Small Business Commissioner had suggested in a 2014 guideline that the last “or” should be read as “and”, which would have narrowed the exclusion. In a 2016 decision, VCAT rejected that reading: “or” means “or”, and a lease of 15 years or more that contains any one of the three provisions is excluded. In that case the tenant of vacant land had to build a fresh food market building and its stall to a detailed plan attached to the lease, which was substantial on any view.
A provision that merely permits the tenant to carry out works is different. VCAT has held that a lease allowing, but not obliging, the tenant to do works was not caught.
The Halski decision: specific works, identified at the start
In October 2025 the County Court considered the determination, which appears to be the first time a court had done so. The lease was a 21 year lease of a caravan park, on a standard form lease with added provisions. The landlord relied on:
- a provision making the tenant responsible for “all substantial work” on the premises, in words close to the determination’s;
- a provision that permanent improvements would become the landlord’s property at the end of the lease; and
- a provision stating that the premises were not retail premises because of the determination.
The Court held that the determination did not apply, so the Act governed the lease. The main points, as reported, were:
- A general obligation is not enough. Making the tenant responsible for “all substantial work” did not oblige it to carry out any particular work. It was too nebulous to be the kind of obligation the determination describes.
- The works must be specific and identifiable when the lease is entered into. A general covenant to keep the premises in repair does not bring a lease within the determination, even if it extends to capital or structural repairs that arise during the term.
- The improvements clause did not help. Without a qualifying works obligation, a clause making improvements the landlord’s property did not satisfy the removal limb.
- The recital was void. The statement that the Act did not apply was an attempt to contract out of the Act, and so void under s 94. The Court also rejected an argument that the tenant was estopped from denying that the determination applied. A statement in the lease does not stop the tenant arguing that the Act applies.
The appeal in November 2026
An appeal from the Halski decision is listed for hearing in the Court of Appeal on 10 November 2026. Until the Court of Appeal decides it, the County Court’s decision is the most recent guidance, but it is not the final word. The law may change after the appeal, in either direction, and a lease that looks safely inside or outside the Act today may need a fresh look once the Court rules. We will update this guide after the decision.
Practical points
For landlords granting a long lease and wishing to rely on the determination:
- identify the substantial works in the lease itself: what is to be built, installed or replaced, to what standard, by when and at whose cost, with plans or a scope of works attached;
- do not rely on copying the determination’s words, or on a statement that the Act does not apply;
- keep the term at 15 years or more without counting options, and be wary of a tenant’s no-fault break right; and
- draft the lease so it still works if the Act is found to apply, for example in the rent review and outgoings clauses. See preparing a lease and permitted use clauses and the Act.
For tenants, a long term and a heavy repair covenant do not by themselves take a lease outside the Act. If you are paying land tax, or were not given a disclosure statement, under a long lease of retail premises, it is worth checking whether the determination really applies. Our guide to the Retail Leases Act explains what the Act gives you if the determination does not apply.
How we help
- A free 15-minute phone call to tell you whether the determination is worth examining for your lease.
- Advice on whether an existing long lease is governed by the Act, and what follows for land tax, outgoings and rent reviews.
- For landlords: long leases with works obligations drafted so they are specific and identifiable. We quote in writing before we start.
- Reviewing a long lease before you sign. See commercial lease review.
Common questions
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Usually yes, if the premises are retail premises and no other exclusion applies. A lease of 15 years or more, not counting options, is excluded only if it also obliges the tenant or another person to carry out substantial works, or pay a substantial amount for them, or in a significant respect stops the tenant removing them at the end of the lease.
No. The determination counts only the term itself, excluding options to renew. A lease with a no-fault break clause may also not count as a 15 year term.
On the County Court’s 2025 decision, no. A general covenant to keep the premises in repair is not enough, even if it extends to structural or capital repairs. The works need to be specific and identifiable when the lease is entered into. An appeal is listed for 10 November 2026.
No. A provision saying the Act does not apply is void if the Act in fact applies, and the County Court has held that it does not stop the tenant from arguing otherwise.
Law referred to
- Retail Leases Act 2003 (Vic) ss 4(2)(f), 5(1)(c) and 94.
- Ministerial determination under s 5(1)(c), Premises Not Constituting Retail Premises (leases of 15 years or more), Victoria Government Gazette, No S 184, 23 August 2004.
- Bella Barista Pty Ltd v Glenview Place Pty Ltd [2013] VCAT 649.
- Luchio Nominees Pty Ltd v Epping Fresh Food Market Pty Ltd [2016] VCAT 937.
- Cunningham Pier Pty Ltd v Seabrook Events Pty Ltd [2021] VCAT 1004.
- LFRACM Inc v Halski Pty Ltd [2025] VCC 1506; LFRACM Inc v Halski Pty Ltd (No 2) [2025] VCC 1557 (appeal listed in the Court of Appeal for 10 November 2026).
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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