Retail Leases V Non-Retail Leases - 11 Key Differences (Victoria)

Here is our list of Key Differences between Retail Leases and Non-Retail Leases;

1. LEGISLATION
The Retail Leases Act 2003 governs Retail Leases. There is no legislation governing Non-Retail Leases, although several Acts maybe applicable.

2. TERMS AND CONDITIONS
The Lease documents contain the rights and obligations negotiated by the Landlord and Tenant. However, further rights and obligations are imposed on Retail Landlords and Retail Tenants by the Retail Leases Act 2003.

3. DISCLOSURE STATEMENT
A Landlord of a Retail Lease must provide a Disclosure Statement containing a summary of key information regarding the property, rent, outgoings, options, etc to the Tenant . A Landlord of a Non-Retail Lease is not required to provide a Disclosure Statement to the Tenant.

4. DISPUTES
A Landlord and Tenant of a Retail Lease must attempt to mediate a dispute with the Victorian Small Business Commissioner before taking the matter to a Court or Tribunal. There is no obligation on a Landlord and a Tenant of a Non-Retail Lease to Mediate, unless such an obligation is imposed in the Lease documents.

5. RENEWAL OF LEASE/OPTIONS
A Landlord can only refuse a Renewal of a Retail Lease in the circumstances allowed in the Act. A Landlord may refuse a Renewal of Non-Retail Lease in accordance with the terms of the Lease, however, such terms must be reasonable.

6. RENTAL INCREASES DURING MARKET REVIEW
If a Landlord and Tenant of a Retail Lease cannot agree on the Market Rent, a Specialist Retail Valuer must be appointed. In a Non-Retail Lease, Rental increase disputes will be resolved based on the terms of the Lease and/or by a Court/Tribunal.

7. TRANSFERRING THE LEASE
A Landlord can only refuse a Transfer of a Retail Lease in the circumstances allowed in the Act. A Landlord may refuse a Transfer of a Non-Retail Lease in accordance with the terms of the Lease, however, the terms must be reasonable.

8. UNCONSCIONABLE CONDUCT
Landlords and Tenants of a Retail Lease receive additional protections concerning unconscionable conduct of the other party under the Retail Leases Act 2003.

9. 5 YEAR MINIMUM
The Term and Options of a Retail Lease must be for a minimum of five years in total, unless a “5 year waiver certificate” is granted. There is no minimum period for the Lease Term and Options for Non-Retail Leases.

10. LAND TAX
A Landlord cannot pass on the Land Tax to a Tenant in a Retail Lease. A Landlord can pass on these costs in a Non-Retail Lease.

11. LEGAL COSTS
A Landlord cannot pass on the Legal Costs of the Lease and Mortgagee Consent to a Tenant of a Retail Lease. A Landlord can pass on these costs in a Non-Retail Lease.

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Please note that the above is the writer’s personal opinion and SHOULD NOT be treated as legal advice on your matter. This post DOES NOT form an Attorney/Client relationship. Kindly contact a Solicitor to obtain specific legal advice on your matter.