Retail leases update in Victoria

4 minute read  29.09.2022 Max Cameron, Jennifer Blom, Daniel Nash

On 27 September 2022, the Victorian Government gazetted the Retail Leases Amendment Regulations 2022 (Vic) (2022 Regulations). The 2022 Regulations effect changes to the prescribed forms of disclosure statement to be provided by landlords for retail premises leases under the Retail Leases Act 2003 (the Act).



Key takeouts


  • The Retail Leases Act 2003 (Vic) requires landlords to provide disclosure statement to tenants in certain circumstances. The disclosure statement must be in the applicable prescribed form.
  • As the 2022 Regulations come into operation on 1 December 2022, the new forms of disclosure statement should be used for all leases entered into on or after that date.
  • Whilst the amendments to each disclosure statement are not substantive, the new wording must be implemented to ensure compliance with the Act.

Background

Disclosure statements to be provided by a landlord or tenant must be in the applicable prescribed form under the Act (but the layout of the statement does not need to be the same as the prescribed form).

Prescribed forms were contained in the Retail Leases Regulations 2013 (called the Principal Regulations in the 2022 Regulations), but with the 2020 amendments to the Act some minor inconsistencies between the Act and the prescribed forms were created.

The 2022 Regulations update the prescribed forms in the Principal Regulations.

Types of disclosure statements and prescribed forms

The Act (as amended) requires a landlord to provide a disclosure statement to the tenant in the prescribed form as follows:

1. within 14 days before entering into a retail premises lease (where the retail premises are not located in a retail shopping centre) – the prescribed form is at the Principal Regulations, Schedule 1 (as amended);

2. within 14 days before entering into a retail premises lease (where the retail premises are located in a retail shopping centre) – the prescribed form is at the Principal Regulations, Schedule 2 (as amended); and

3. on renewal of a lease –

(a) at least 21 days before the end of the current lease term, where the tenant:

  • has exercised, or
  • is entitled to exercise,

an option to renew a retail premises lease, or

(b) where the parties to the lease enter into an agreement to renew the lease, no more than 14 days after the parties to the lease enter into that agreement,

the prescribed form is at the Principal Regulations, Schedule 3 (as amended); and

4. where a tenant seeks to assign the lease and requests from the landlord a current disclosure statement – the prescribed form is the same form which is required to be given by a landlord to a tenant prior to entry into a new lease of premises in a retail shopping centre or not in a retail shopping centre (as applicable).

Additionally, if a tenant seeks to assign a lease and the lease of retail premises will continue to be used for the carrying on of an ongoing business, the tenant must give the landlord and the proposed assignee a disclosure statement – the prescribed form is at the Principal Regulations, Schedule 4.

Key points

The 2022 Regulations amend the prescribed forms as follows:

1. Schedule 1 – Landlord's disclosure statement – Retail premises not located in retail shopping centres

(a) The amended head note sets out that the landlord must provide a copy of the disclosure statement and the proposed lease to the tenant at least 14 days before the signing of the new lease. If the disclosure statement and lease are provided to the tenant less than 14 days before the lease is entered into, the lease commences 14 days after the landlord has provided the disclosure statement and lease.

(b) New mandatory explanatory guidance notes are inserted noting the landlord's repair obligations under section 52 of the Act.

2. Schedule 2 – Landlord's disclosure statement – Retail premises located in retail shopping centres

(a) The amended head note sets out that the landlord must provide a copy of the disclosure statement and proposed lease to the tenant at least 14 days before the signing of the new lease. If the disclosure statement and lease are provided to the tenant less than 14 days before the lease is entered into, the lease commences 14 days after the landlord has provided the disclosure statement and lease.

(b) New mandatory explanatory guidance notes are inserted noting the landlord's repair obligations under the Act.

3. Schedule 3 – Landlord's disclosure statement on renewal of lease

New disclosure items are inserted requiring the landlord to disclose ‘details of any changes from [the] previous disclosure statement’ in relation to:

  • renewal of the lease;
  • alteration or demolition works planned or known to the landlord to the premises or building/centre including surrounding roads during the term or any further terms;
  • other matters which may materially affect the tenant's ongoing business which are not referred to in the lease and alteration or demolition works planned or known to the landlord to land adjacent to or in close proximity to the premises or building/centre during the term or any further terms; and
  • any other costs not included in outgoings and not referred to in the lease.

The 2022 Regulations do not amend the prescribed assignor disclosure statement at the Principal Regulations, Schedule 4 (Disclosure statement – Assigned lease where ongoing business).

For further information regarding the Retail Leases Amendment Regulations 2022 (Vic), please do not hesitate to contact Max Cameron.

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