Does your lease allow it?
Start with the lease. The relocation and demolition rules in the Retail Leases Act 2003 (Vic) apply where a retail lease provides for the tenant’s business to be relocated, or for the lease to be ended because the building is to be demolished. Where the lease has such a clause, the Act takes it to include the protections in sections 55 and 56, whatever the clause says. A term inconsistent with them is void (s 94).
If the lease has no relocation or demolition clause, the landlord generally has no right to make you move, or to end the lease early for a redevelopment, unless you agree. Put any agreement in writing. These rules apply only to retail leases: see does the Retail Leases Act apply and our Retail Leases Act guide.
Relocation: what the landlord must do
Under section 55, the landlord cannot require the tenant’s business to be relocated, or end the lease and offer a new lease of other premises, unless it has:
- given the tenant details of a proposed refurbishment, redevelopment or extension that are sufficient to indicate a genuine proposal, to be carried out within a reasonably practicable time after the relocation, that cannot practicably be carried out without vacant possession of the premises; and
- given the tenant at least 3 months’ written notice of the relocation, with details of reasonably comparable alternative premises to be made available to the tenant.
Your choices, and the costs
End the lease. Within one month after receiving a relocation notice, the tenant may give the landlord written notice of termination. The lease then ends 3 months after the relocation notice was given, or at another time the parties agree.
Move. If the tenant does not give that notice, it is taken to have accepted a new lease of the alternative premises, on the same terms as the existing lease except that:
- the term is the remaining term of the existing lease; and
- the rent is the existing rent, adjusted for the difference in the commercial values of the two premises at the time of relocation.
The parties can agree different terms instead. The landlord must pay the tenant’s reasonable costs of the relocation, including the costs of dismantling and reinstalling, modifying or replacing fixtures and fittings, and legal costs. If the parties cannot agree on the amount, an independent quantity surveyor decides it, appointed by agreement or, failing agreement, by the Victorian Small Business Commission. The parties share the surveyor’s costs equally.
Demolition clauses
Under section 56, a landlord cannot end a retail lease on the ground of a proposed demolition unless it has:
- given the tenant details sufficient to indicate a genuine proposal to demolish the building within a reasonably practicable time after the lease is to end; and
- given the tenant at least 6 months’ written notice of the termination date.
Demolition includes any substantial repair, renovation or reconstruction of the building that cannot practicably be carried out without vacant possession. Once the landlord has given a valid notice, the tenant may leave earlier by giving at least 7 days’ written notice.
Compensation
Whether the landlord or the tenant ends the lease under section 56, the landlord must pay the tenant reasonable compensation:
- for the tenant’s fit-out, to the extent the landlord did not provide it, whether or not the demolition goes ahead; and
- if the demolition is not carried out, or not within a reasonably practicable time after the termination date, for the damage the tenant suffers because the lease ended early. The landlord avoids this second head of compensation if it proves there was a genuine proposal to demolish when it gave the notice.
The amount is as agreed or, failing agreement, decided under the Act’s dispute resolution process (see lease disputes). Check what the lease says about make good on an early termination, and raise it in the negotiation.
Works while you stay
Under a retail lease, the landlord must not start an alteration or refurbishment of the building or centre that is likely to affect the tenant’s business adversely without at least 60 days’ written notice, unless the work is needed because of an emergency and the landlord gives as much notice as is reasonably practicable (s 53).
Section 54 also requires the landlord to pay reasonable compensation for loss or damage (other than nominal damage) where the landlord, or someone acting for it:
- substantially inhibits the tenant’s access to the premises;
- unreasonably takes action that substantially inhibits or alters the flow of customers to the premises, or causes significant disruption to the tenant’s trading;
- fails to take reasonable steps to prevent or stop significant disruption to trading that is within the landlord’s control; or
- fails to fix certain breakdowns and defects as soon as practicable, or neglects to clean, maintain or repair the building adequately (see landlord repairs).
Section 54 does not apply to a reasonable response to an emergency, or to action taken to comply with a duty or requirement imposed under legislation. The tenant must give written notice of the loss as soon as practicable, although failing to do so does not remove the right. The amount is agreed or, failing agreement, decided under the same dispute process.
Offices, warehouses and factories
Outside the Retail Leases Act, sections 53 to 56 do not apply. Whether the landlord can relocate you or end the lease for a redevelopment, the notice it must give, and any compensation, depend on the lease. Read these clauses closely in a lease review before you sign, and negotiate notice periods and compensation then.
For landlords
Plan the redevelopment around the leases. Check which leases contain relocation or demolition clauses, give notices with the details the Act requires, and keep records showing the proposal is genuine. On a demolition, it is the landlord that must prove a genuine proposal to avoid compensation for early termination.
How we help
- Reviewing and negotiating relocation and demolition clauses before you sign.
- Advice on a relocation or demolition notice: whether it is valid, your choices and the deadlines.
- Negotiating the new lease, relocation costs or fit-out compensation.
- Compensation claims for disruption during works.
- For landlords: notices and redevelopment planning that comply with the Act.
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.
Only if the lease has a relocation clause or you agree. Under a retail lease, the landlord must also have a genuine refurbishment, redevelopment or extension proposal that needs vacant possession, and give at least 3 months’ written notice with details of reasonably comparable alternative premises.
No. Under a retail lease, you may end the lease by written notice within one month after the relocation notice. If you do not, you are taken to have accepted a new lease of the alternative premises.
Under a retail lease, the landlord pays your reasonable relocation costs, including dismantling and reinstalling, modifying or replacing fixtures and fittings, and legal costs. If you cannot agree on the amount, an independent quantity surveyor decides, and the surveyor’s costs are shared equally.
At least 6 months’ written notice of the termination date, with details showing a genuine proposal to demolish within a reasonably practicable time. Demolition includes substantial repair, renovation or reconstruction that cannot practicably be done without vacant possession.
Under a retail lease, the landlord must pay reasonable compensation for your fit-out, to the extent the landlord did not provide it, whether or not the demolition goes ahead.
Law referred to
- Retail Leases Act 2003 (Vic) ss 53, 54, 55, 56 and 94, and Part 10.
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.
Tell us about your lease
Send the form, or call. We reply within one business day, by phone, email or text, whichever you prefer.
What happens next
- Send the form.
- We reply within one business day.
- We arrange a time to talk, or ask for the lease and any other documents we need first.
Phone: 1800 776 529 (1800 PRO LAW)
Email: info@leaselawyers.com.au
Hours: Monday to Friday, 9 am to 5:30 pm
Office: 435 Nepean Highway, Frankston VIC 3199. We act across Victoria by phone, video and email.