Types of rent review
- Fixed percentage: the rent goes up by a set percentage at each review.
- Index (CPI): the rent moves with an independently published index, usually the consumer price index.
- Fixed amount: the rent goes up by a set dollar amount.
- Market review: the rent is reset to the current market rent, usually at the start of an option term or at set intervals.
Read the review clause before you sign. The basis, the timing and the procedure for a market review all affect what you will pay over the term.
Retail leases: what the Act requires
Under the Retail Leases Act 2003 (Vic):
- the lease must state when rent is reviewed and the basis for each review: a fixed percentage, an index, a fixed amount, or current market rent (s 35);
- a term that prevents or limits a reduction in rent at a market review is void. This does not apply to fixed percentage, index or fixed amount reviews (s 35);
- if the landlord has not started a review within 90 days after the time the lease allows, the tenant may start it (s 35); and
- if the review clause does not comply with the Act and the parties cannot agree the rent within 30 days of a written notice, a specialist retail valuer appointed by the Small Business Commission determines the market rent, with the cost shared equally.
Caps on rent increases
Under a retail lease, a cap on a CPI or market review, such as CPI but no more than 5%, is allowed. The Supreme Court decided this in December 2024, departing from earlier VCAT decisions, and the Court of Appeal refused leave to appeal in June 2026. A clause that stops the rent falling at a market review is still void.
Market rent reviews under a retail lease (s 37)
- The review is made by a specialist retail valuer, appointed by agreement or, failing agreement, by the Small Business Commission. The cost is shared.
- Current market rent is assessed without the value of the tenant’s goodwill or the tenant’s fixtures.
- The landlord must give the valuer comparable leasing information within 14 days of a request.
- The valuation must be in writing with detailed reasons, and is generally made within 45 days after the valuer accepts the appointment.
Under a retail lease, if the rent for the renewed term is to be set by a market review, a tenant with an option may ask for that review to be done early, within 28 days after the landlord’s option reminder notice, before deciding whether to exercise the option. See options to renew.
Offices, warehouses and factories
Outside the Retail Leases Act, the lease itself sets the rules. A clause that stops the rent from going down at a market review may be valid, and the process for appointing a valuer and making submissions is whatever the lease provides. That makes the drafting, and a review before you sign, more important.
When the new rent looks wrong
- Check that the review is being made at the right time and on the basis the lease states.
- Check any notice requirements and deadlines. Some leases make a rent binding if a party does not respond in time.
- For a market review, consider making a written submission to the valuer with comparable rents.
- Talk to us early. A review is often easier to resolve before a valuer is appointed.
How we help
- Reviewing and negotiating rent review clauses before the lease is signed.
- Advice on a review notice you have received or need to send.
- Market review submissions and dealing with the valuer.
- For landlords: review clauses that comply with the Retail Leases Act.
Common questions
Can’t see your question? Call 1800 776 529 or send us a message.
Under a retail lease, yes: a term that prevents the rent going down at a market review is void. Under other leases it depends on the lease, so check for a clause that stops the rent going down.
Under a retail lease, the landlord and tenant share the cost of a specialist retail valuer. Under other leases, the lease decides.
Under a retail lease, if the landlord has not started a review within 90 days after the time the lease allows, the tenant may start it.
Yes. A cap on a CPI or market review, such as CPI but no more than 5%, is allowed under a retail lease. A clause that stops the rent falling at a market review is still void.
No. During the term, the rent changes only as the lease provides. The rent review clause sets when the rent is reviewed and how: by a fixed percentage, CPI, a fixed amount or a market review. Under a retail lease, the lease must state this.
Law referred to
- Retail Leases Act 2003 (Vic) ss 3 (definition of specialist retail valuer), 28A, 35, 37 and 81(2).
- Aldi Foods Pty Ltd v Northcote Shopping Centre Pty Ltd [2024] VSC 799; Northcote Shopping Centre Pty Ltd v Aldi Foods Pty Ltd [2026] VSCA 140.
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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