The simple answer regarding the difference between a commercial and a retail lease is whether the premises to which it relates falls under the definition of a “retail premises” under the Retail Leases Act.
For a summary regarding retail premises in Victoria, please follow the link: https://www.vsbc.vic.gov.au/your-rights-and-responsibilities/entering-into-a-retail-lease/what-are-retail-premises/
Amendments to the Retail Lease Regulations
A landlord’s obligations to provide disclosure to retail tenants is a key part of the retail lease regime.
From 1 December 2022, the Retail Leases Regulations have been updated to bring the prescribed Disclosure Statement forms in line with the 2020 changes to the Retail Leases Act 2003 (Vic) (“Act”). These changes include:
- Notice that disclosure statements must be completed by the landlord and provided to the tenant with a copy of the lease at least fourteen (14) days before the lease is entered into (previously it was seven (7) days).
- Sections in the disclosure statement regarding outgoings estimates now includes notes referencing that the landlord is liable for certain costs concerning maintenance and repairs per section 52 of the Act. This section refers to costs to repair structures and fixtures, plant and equipment (present from the start of the lease), appliances, fixtures and fittings relating to services such as gas, water, electricity, drainage.
- The 2020 amendments to the Act includes that tenants may agree with the landlord to carry out (or arrange for) repairs or maintenance of essential safety measures (“ESM”). This does not limit a tenant’s obligation, if required under their lease, to contribute outgoings for repair or maintenance of ESM.
- On the renewal of a lease, landlords are required to set out details of any changes from the previous disclosure statement provided.
For more information regarding disclosure statements, please follow the link: https://www.vsbc.vic.gov.au/your-rights-and-responsibilities/accurate-lease-information/
For a summary of the 2020 amendments to the Act, see also: https://www.vsbc.vic.gov.au/your-rights-and-responsibilities/entering-into-a-retail-lease/retail-leases-act-2003/
Victorian Supreme Court Commercial and Retail Leases List
From 4 April 2022, the Supreme Court of Victoria has implemented a new cross-divisional list to promote an efficient approach to managing lease disputes. The Commercial and Retail Lease List manages:
- first instance proceedings concerning commercial premises; and
- appeals from the Victorian Civil and Administrative Tribunal (“VCAT”) on:
- questions of law; and
- VCAT decisions concerning commercial and retail lease disputes.
Disputes regarding retail leases (i.e. leases governed by the Act) must still be heard in VCAT in first instance.
It is not always easy to determine whether a premises is covered by the Act. Cases over the last few years have expanded the scope of premises used for “the sale or hire of retail goods or provision of retail services” to include premises which supply commercial goods or services to other businesses, not just the wider public.
If you wish to seek clarity regarding whether your lease is governed by the Act or have questions regarding your rights and/or responsibilities under the Act, please do not hesitate to contact us on (03) 9039 2142 to schedule an appointment.