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Commercial lease disputes in Victoria: offices, warehouses and factories
Disputes under leases outside the Retail Leases Act follow different rules. There is no compulsory mediation, and the choice between VCAT and a court can affect the remedies available and who pays the costs.
Which leases this covers
The Retail Leases Act 2003 (Vic) applies only to leases of retail premises. Many office, warehouse and factory leases fall outside it, as do retail leases the Act excludes, for example where occupancy costs are more than $1 million a year or the tenant is a listed company. Disputes under these leases are governed by the lease, the general law and the Property Law Act 1958 (Vic), not by the Act’s dispute rules.
Some leases that look commercial are retail leases, because services are sold from the premises. And the Act’s dispute provisions reach some leases of retail premises that the rest of the Act does not cover. So the first step is to confirm which regime applies. See does the Retail Leases Act apply and is a warehouse or office lease a retail lease.
VCAT or a court
A dispute under a non-retail lease can be brought at VCAT or in a court, depending on the claim. There is no requirement to mediate at the Victorian Small Business Commission first, and VCAT does not need the Commission’s certificate for a commercial (non-retail) tenancy dispute.
VCAT hears commercial lease disputes under its general jurisdiction in the Australian Consumer Law and Fair Trading Act 2012 (Vic). Among the lease disputes VCAT says it hears are injunctions, recovery of rent and outgoings, rent reviews, options, damage to the premises and compensation for interference with trading. The Magistrates’ Court, the County Court and the Supreme Court can also hear lease claims, each within its own jurisdiction.
Choosing where to go
| Issue | VCAT | Court |
|---|---|---|
| Legal costs | Each party usually pays its own, unless VCAT orders otherwise | The losing party is usually ordered to pay part of the winner’s costs |
| Relief against forfeiture | Not settled for non-retail leases | The Supreme Court can grant it |
| Federal jurisdiction | Cannot hear the case | Can hear the case |
| Large or complex claims | May be referred to a court | Suited to them |
VCAT can also refer a proceeding to a court, and it has referred some larger commercial tenancy disputes to the higher courts, so for a substantial or complex claim, starting in court may save time. Other factors include how urgent the matter is, whether the lease has a costs clause, whether claims against guarantors or others should be heard together, and the time limits that apply.
Relief against forfeiture: an unsettled question
For a retail lease, the Act expressly gives VCAT the Supreme Court’s powers to grant relief against forfeiture (see our guide to the Retail Leases Act). For other leases, it is not settled whether VCAT has that power. In a 2025 decision about a retail lease, the Supreme Court said that a tribunal needs an express grant from Parliament to exercise equitable powers of this kind, such as the grant in the Retail Leases Act. The Court did not decide whether VCAT has the power for non-retail leases.
That matters most to a tenant facing re-entry. An injunction at VCAT can hold the position before re-entry, but if relief against forfeiture is likely to be needed, a court may be the safer place to start. We advise on this at the outset. See locked out by your landlord.
When VCAT cannot hear the case
In 2022 the Court of Appeal held that VCAT is not a court that can exercise federal jurisdiction, so VCAT cannot decide a case in which federal jurisdiction genuinely arises. VCAT says this can happen where, for example:
- the parties are individuals who live in different states (this does not apply to companies);
- a claim or defence genuinely relies on a Commonwealth Act, which has “(Cth)” in its title; or
- the Commonwealth is a party.
If that happens, VCAT has to strike the case out and it must start again in a court. Part 3A of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) allows the case to be started in the Magistrates’ Court, which can transfer it to the County Court or Supreme Court in some circumstances. In a lease dispute, check this before filing, particularly where a guarantor lives interstate.
Costs
At VCAT, each party usually pays its own legal costs unless the Tribunal orders otherwise, even if it wins. VCAT may order costs where it is fair to do so, for example where a party conducted the case vexatiously, caused unreasonable delay, or brought a claim with no reasonable basis. The narrower costs rule for retail tenancy disputes does not apply to disputes under these leases.
In the courts, the losing party is usually ordered to pay part of the winner’s costs, so the cost of losing is higher. Many leases also contain a clause about the landlord’s costs of enforcing the lease, which we take into account when advising on where to go.
Mediation and negotiation
Mediation is not compulsory before a non-retail lease dispute is filed, but it is often worth trying. Lease disputes are usually about money and the future of the lease, and both can be resolved by agreement. The options include a negotiated settlement through lawyers, a private mediation, and the mediation and other dispute resolution processes VCAT uses once a case is under way. A settlement should be recorded in writing and should deal with the lease going forward, for example by a deed of variation or surrender.
For how retail lease disputes differ, see lease disputes.
How we help
- Advice on whether the Retail Leases Act applies, and on the right forum.
- Negotiation and mediation for tenants and landlords.
- VCAT applications, including urgent injunctions.
- Court proceedings, with a barrister briefed where a hearing needs one.
Start with a free 15-minute phone call. We quote in writing before we start.
Common questions
Can’t see your question? Call 1800 776 529 or send us a message.
Not if the lease is outside the Retail Leases Act, as many office, warehouse and factory leases are. VCAT says no certificate is needed for a commercial (non-retail) tenancy dispute.
It depends on the claim. At VCAT each party usually pays its own costs, but VCAT cannot hear cases involving federal jurisdiction, and whether it can grant relief against forfeiture of a non-retail lease is unsettled.
Not where both parties are individuals who live in different states. That rule does not apply to companies. The case can be started in a court instead.
At VCAT, each party usually pays its own costs unless VCAT orders otherwise. In court, the losing party is usually ordered to pay part of the winner’s costs.
Law referred to
- Retail Leases Act 2003 (Vic) ss 11(2), 81, 89(2) and 92.
- Property Law Act 1958 (Vic) s 146.
- Australian Consumer Law and Fair Trading Act 2012 (Vic).
- Victorian Civil and Administrative Tribunal Act 1998 (Vic) pt 3A.
- Thurin v Krongold Constructions (Aust) Pty Ltd [2022] VSCA 226.
- Paramount Investments Group Pty Ltd v Club Fogolar Furlan Melbourne [2025] VSC 90.
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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