Practice Areas / Commercial Leases
Commercial & Retail Lease Lawyers
Retail, office and industrial leases for landlords and tenants across Melbourne, Frankston and the Mornington Peninsula, from the first draft to the end of the lease. Advice in English or Polish.
Getting the lease right
A lease sets the rules for years of occupation, and once it is signed your position is largely fixed for the term. Many leasing disputes can be traced to a clause nobody read closely: the rent review, the outgoings, the make-good obligation or the conditions attached to an option.
We act for landlords and tenants of shops, offices, warehouses and factories, and for buyers and sellers of businesses where a lease is being assigned. Radek Dajer acts personally on each lease and dispute, and can advise in Polish.
How we help with commercial leases
Acting for landlords
Leases, disclosure statements, outgoings estimates and reconciliations, and enforcement where a tenant falls into arrears or breaches the lease.
Acting for tenants
Review and negotiation before you sign, rent reviews, options to renew and make-good obligations at the end of the lease.
Changing or ending a lease
Deeds of variation, assignment on the sale of a business, subleases, and negotiated surrenders when a tenant needs to leave early.
Lease disputes
Breach notices, termination, and outgoings and rent disputes, through negotiation, mediation at the Small Business Commission, VCAT or the courts.
Retail or commercial: which rules apply
Many leases of shops and service businesses are governed by the Retail Leases Act 2003 (Vic). The Act overrides inconsistent lease terms and gives tenants protections that cannot be contracted out of. Offices, warehouses and factories are often outside it, and then the lease itself governs.
- Retail premises: the Act covers premises used wholly or mainly for the retail sale or hire of goods or the retail provision of services, but not where occupancy costs exceed $1 million a year or the tenant is a listed company.
- Disclosure: the landlord must give a retail tenant 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.
- Minimum term: a retail lease, including options, must generally run for at least 5 years, unless the tenant obtains a certificate from the Small Business Commission and gives it to the landlord.
- Outgoings and land tax: a retail tenant generally cannot be charged land tax, capital costs, depreciation or the landlord’s costs of preparing the lease, and outgoings must be estimated in advance and reconciled each year.
- Rent reviews: the lease must state when and how rent is reviewed, and a market rent review cannot be prevented from reducing the rent.
Acting for landlords and tenants
For landlords, we prepare leases and disclosure documents that comply with the Act and protect the investment. For tenants, we review the terms before you sign, while there is still room to negotiate.
- Lease preparation: rent and rent reviews, permitted use, repairs, make-good, security deposits, guarantors and options to renew, drafted for the premises and the parties.
- Lease review and negotiation: we identify the clauses that cause most disputes and negotiate rent, outgoings, incentives, make-good and option terms.
- Options to renew: under a retail lease, the landlord must remind the tenant of the option deadline at least 3 months before it closes. Under other leases, a missed deadline can cost the tenant the option.
- Assignment: a retail landlord may refuse consent only on limited grounds, and is taken to consent if it does not respond within 28 days of a complete request.
Read the lease before you sign it
Once a lease is signed, your position is largely fixed for the term. Rent review, outgoings and make-good clauses cause many of the disputes that follow, and the least expensive time to fix them is before signing.
Changing, ending and disputing a lease
Rent is renegotiated, businesses are sold and tenants need to leave early. Each change should be properly documented, because informal arrangements often lead to later disputes.
- Variation: a deed of variation for changes to rent, term, permitted use or area, with advice on whether the change affects disclosure, an option or a guarantor.
- Surrender: a deed of surrender to end the lease early by agreement, covering any surrender payment, make-good and the return of security.
- Breach and termination: breach notices under the Property Law Act 1958 (Vic), re-entry and the validity of a termination, and claims for rent, outgoings and damages.
- Retail disputes: most must go to mediation at the Victorian Small Business Commission before VCAT can hear them, unless an injunction is sought. Each party usually bears its own costs at VCAT.
- Other disputes: non-retail lease disputes, including make-good and outgoings claims, are generally heard in the courts.
Negotiating a lease or dealing with a dispute?
Book a consultation to talk through the lease and your options. Ready to proceed with a new lease, renewal, assignment or surrender? Send us your instructions online.
Common questions
Can’t see your question? Call 1800 776 529 or send us a message.
The Retail Leases Act 2003 (Vic) generally applies to premises used wholly or predominantly for the retail sale or hire of goods or the retail provision of services, subject to exclusions, including where occupancy costs exceed $1 million a year. Whether it applies is a question of fact and law, and it matters because the Act overrides inconsistent lease terms. We advise on it before you sign.
A make-good clause requires the tenant to return the premises to a defined condition at the end of the lease. The scope varies widely between leases, and the cost can be substantial. We advise on what a clause actually requires, negotiate the scope of works, and act where a landlord’s claim goes beyond the lease.
Not under a retail lease. The Retail Leases Act 2003 (Vic) makes void any term requiring a retail tenant to pay the landlord’s land tax or commercial and industrial property tax. Under a non-retail lease it depends on the lease, so check whether land tax is recoverable and how your share is calculated before you sign.
Not unilaterally, unless the lease or the law gives you that right. The usual routes are a negotiated surrender, or an assignment of the lease to an incoming tenant, often on the sale of the business. Both require the landlord’s involvement. We advise on which is realistic in your circumstances and negotiate the terms.
Most are heard at the Victorian Civil and Administrative Tribunal, which has exclusive jurisdiction over retail tenancy disputes, with limited exceptions. The dispute must first go to mediation at the Small Business Commission, and VCAT can hear it only once the Commission certifies that mediation has failed or is unlikely to succeed, unless an injunction is sought. Non-retail lease disputes are generally heard in the courts.
The lease is usually assigned to the buyer, which needs the landlord’s consent. Under a retail lease, the landlord can refuse only on limited grounds, and if you give the landlord and buyer an accurate disclosure statement, you and your guarantors are released from liability for the buyer’s defaults. We act for sellers and buyers and prepare the deed of assignment.
Leasing insights
The Retail Leases Act 2003 (Vic) gives retail tenants in Victoria important protections. Learn about disclosure statements, minimum lease terms, rent reviews, and how to resolve disputes at VCAT.
Signing a commercial lease is one of the biggest financial commitments a business can make. A lawyer can identify risks before you are locked into a long-term obligation.