Retail Leases Act 1994

The Act’s primary subjects are “lessors” and “lessees” as defined in s 3(1). A lessor includes a head lessor, sublessor and their assigns, heirs, executors and administrators; the term extends to proposed lessors where the provision concerns a proposed lease (s 3(2)). A lessee includes sublessees and their assigns, heirs, executors and administrators. Guarantors and covenantors are expressly brought within the compensation and unconscionable-conduct provisions (ss 62B(10), 62C(1)) and are protected by the assignor-release mechanism in s 41A(4).

The Act affects any person who grants or takes a right of occupation of premises that satisfy the retail-shop definition. Because the definition is use-based rather than title-based, it catches oral tenancies, licences and agreements for lease (s 3(1) “retail shop lease”). It binds the Crown (s 83) and therefore applies to government-owned retail premises unless expressly exempted by regulation under s 82.

Shopping-centre owners and managers are separately affected by the additional obligations in Part 7 (marketing plans, audited advertising statements, core-trading-hour votes, tenancy-mix disclosures). Airport operators fall under the modified regime in Part 9A. Specialist retail valuers appointed by the Registrar (s 32B) or previously by the Tribunal are subject to confidentiality duties (s 31A), compensation liability for breach (s 31A(3)), and statutory immunity when acting in good faith (s 32B(5)). The Secretary (Department of Customer Service) administers the security-bond trust accounts, issues penalty notices (s 83A), and may delegate functions (s 82B). Mediators appointed under arrangements made by the Registrar enjoy judicial immunity (s 66(3)).

Excluded categories—operators of shops larger than 1,000 m², cinema operators, permanent-market stallholders (unless the market meets s 6B(2)), and short-term lessees who never reach the one-year continuous-possession threshold—are outside the Act’s protective and prescriptive regime, although they remain subject to general contract and Conveyancing Act 1919 rules.

Lessor duties include: providing a compliant disclosure statement at least seven days before entry (s 11(1)), updating it for renewals (s 11(4)), supplying an updated statement within 14 days if requested for an assignment (s 41(d)), returning executed leases within three months (s 15), lodging registrable leases (s 16), giving outgoings estimates and audited statements on time (ss 27, 28), supplying marketing plans and advertising statements (ss 53–55), returning bank guarantees within two months after performance (s 16BA(1)), and paying compensation for disturbance (s 34), demolition (s 35(3)–(3A)) or pre-lease misrepresentations (s 10). The lessor must not seek key-money or most lease-preparation expenses (s 14(1)), must deposit security bonds with the Secretary (s 16C), and must act honestly and reasonably if a disclosure statement is defective (s 11(3)).

Lessee duties include: providing a lessee disclosure statement within seven days of receiving the lessor’s statement (s 11A(1)), giving an assignor disclosure statement and disclosure confirmation if seeking statutory release (s 41A(2)), paying rent and disclosed outgoings on time, and complying with any police-check or industrial-award clauses permitted by s 37.

Mutual rights: either party may refer a retail tenancy dispute to the Registrar for mediation (s 66(1)); either may apply to the Tribunal for relief (ss 71, 71A). A lessee enjoys a statutory right to terminate for defective disclosure (s 11(2)), to withhold outgoings or advertising contributions until statements are supplied (ss 28A, 55A), to compensation for disturbance (s 34(1)), and to adjustment of turnover rent (s 20(2)). A lessor may refuse assignment on the five grounds in s 39 and may require a bank guarantee in lieu of a cash bond (s 16B). Both parties must act in good faith for the purposes of the unconscionable-conduct prohibition (s 62B(3)(k), (4)(k)).

The Act implies numerous terms: no rent before substantial fit-out completion (s 17), rent-review frequency (s 18), turnover exclusions (s 20), outgoings adjustment within four months (s 29), compensation for demolition (s 35), and the bank-guarantee return obligation (s 16BA).

Criminal sanctions are modest but targeted. Seeking or accepting key-money or prohibited lease-preparation expenses carries a 100-penalty-unit maximum (ss 14(2)(a), 45(2)(a)). Failure to provide a proposed lease and guide before negotiations (s 9(1)), to give a disclosure statement (s 11(1)), to provide an updated disclosure for assignment (s 41(d)), to deposit a security bond (s 16C(2)), or to return a bank guarantee (s 16BA(1)) each attract 50 penalty units. General offences under Part 2A carry 20 penalty units (s 16Q(2)). Corporate officers are personally liable if they knowingly authorise or permit a corporate contravention (s 16R).

Civil enforcement is primarily through the Tribunal. A lessee may terminate for defective disclosure and recover fit-out costs (s 11(2A)). Compensation for pre-lease misrepresentation (s 10), disturbance (s 34), demolition (s 35(3)), failure to return a bank guarantee (s 16BA(5)), or unconscionable/misleading conduct (ss 62B(8), 62E) is recoverable as a retail tenancy claim or unconscionable-conduct claim (ss 70, 71, 71A). The Tribunal may order rectification of disclosure statements or leases (s 72(1)(e)–(e1), s 72AB), relief against forfeiture, specific performance, declarations, and money orders up to the $750,000 jurisdictional limit (s 73). Interest may be awarded (s 72A).

The Secretary may issue penalty notices (s 83A) and recovers unpaid fees as debts (s 16ZB). The Fines Act 1996 applies to penalty notices. Proceedings for offences must be commenced within three years after the offence or, for security-bond matters, within three years after lease termination, whichever is later (s 16S).

The Act is expressly paramount over inconsistent lease terms (s 7) but sits within a web of related legislation. Registration of long leases is governed by the Real Property Act 1900 (ss 15–16); the Act’s three-month lodgment obligation supplements but does not displace the Torrens title regime (s 16(4)). Strata schemes are accommodated by treating strata levies as outgoings (s 3(1)) and by special rules in s 62 for strata shopping centres, where by-laws are treated as if they were lease provisions for the purposes of ss 50–56 and 61.

GST is excluded from the turnover-rent calculation (s 20(1)(j)) and from the definition of outgoings where it is notional GST paid by a State entity (s 3(1)). The A New Tax System (Goods and Services Tax) Act 1999 (Cth) supplies the meaning of “GST” and “taxable supply” (s 3(1), s 3A(1)(b)). Land tax is limited by reference to the Land Tax Management Act 1956 (s 26).

Security bonds are removed from general contract law once deposited; the statutory trust (Part 2A) and the Retail Leases Security Bonds Trust Account override any lease term (s 16E(1)). The Civil and Administrative Tribunal Act 2013 supplies the Tribunal’s general powers, but the Act’s specific jurisdictional rules (ss 70–76A) and monetary limit (s 73) prevail. The Interpretation Act 1987 applies to the construction of the Act (Note to s 3(1)).

Part 9A interacts with the Airports Act 1996 (Cth) and the Air Navigation Regulations 1947 (Cth) by adopting their definitions of airport passenger terminals and airside premises. The COVID-19 response provisions in Part 11 authorised regulations under multiple statutes, including the Act, to override termination and re-entry rights; those regulations were saved by s 88.

The Act does not oust the general law of estoppel, rectification or Conveyancing Act 1919 s 133B (modified by s 43), but any exercise of those doctrines must accommodate the Act’s mandatory provisions. Tribunal orders for rectification (s 72AB) can be made only on the four limited grounds listed, thereby constraining equitable rectification.

The most significant recent overhaul was effected by the Retail Leases Amendment (Review) Act 2017 (No 2 of 2017). It substituted ss 15 and 16 to align execution and registration obligations with practical conveyancing practice, inserted s 3A to define “outgoings” exhaustively, added s 6B to regulate permanent retail markets (including power to prescribe a mandatory code), inserted s 12A to protect lessees from undisclosed outgoings (with a “no reasonable basis” reduction mechanism), and introduced s 16BA to compel return of original bank guarantees within two months or the provision of cancellation consents, with compensation for loss.

The 2017 Act also amended the disclosure-statement regime (Sch 2), expanded the Tribunal’s rectification power (s 72AB), increased the monetary limit from $400,000 to $750,000 (s 73), and inserted online-service provisions (s 16WA) to facilitate electronic bond lodgment and claims. Part 11 (ss 87–89) was added by the COVID-19 Legislation Amendment (Emergency Measures) Act 2020 and subsequent Acts to authorise regulations prohibiting re-entry, termination and enforcement of rights for “impacted leases”, with savings provisions (s 88) continuing the effect of the Retail and Other Commercial Leases (COVID-19) Regulation 2022 after its repeal.

These changes were driven by the 2015 statutory review, which identified gaps in disclosure, bond administration, bank-guarantee return, and small-business protection during economic shocks. The 2017 amendments also responded to stakeholder concern about repeated short-term leases evading the five-year minimum-term rule (s 16) and the complexity of outgoings recovery.

The source text contains no specific case citations; therefore no particular judgments are referenced. However, the Act itself records legislative awareness of recurring disputes. Section 10(2) treats the giving of a lessor’s disclosure statement as a representation, thereby crystallising a statutory cause of action for misleading conduct that had previously been litigated under the general Fair Trading Act 1987. Section 11(3) codifies the “honest and reasonable” defence that had emerged in Tribunal decisions concerning incomplete disclosure statements. The insertion of s 72AB in 2005 (and its tightening in 2017) was a direct legislative response to Tribunal and court attempts to rectify disclosure statements on wider equitable grounds; the section now confines rectification to consent, error, common intention or actual disclosure.

Controversies around security bonds prompted the 2005 insertion of Part 2A and the 2017 addition of s 16BA; the two-month return rule and compensation remedy address the commercial reality that lessees often cannot obtain replacement finance while an old guarantee remains outstanding. The airport provisions in Part 9A (added in 2002 and refined in 2024) reflect sustained lobbying by airport operators that standard retail protections were incompatible with security, safety and international-competition requirements; the absolute discretion to refuse assignment to an assignee with “inferior skills for competing in the international airport retail market” (s 80E) is a statutory recognition of that position.

The monetary limit increase to $750,000 (s 73) and the removal of the previous $400,000 cap on unconscionable-conduct claims were intended to reduce the number of matters forced into the Supreme Court under s 76A, a provision that had itself been inserted in 1998 to resolve jurisdictional uncertainty after the Commercial Tribunal was replaced by the Administrative Decisions Tribunal.

Most practitioners still miss that “retail shopping centre” is a four-limbed cumulative test (s 3(1)(a)–(d)). A cluster may satisfy three limbs yet fail the fourth if it is not promoted or generally regarded as a shopping centre; the Act’s additional obligations in Part 7 therefore never engage. The lettable-area definition (s 3(1)) expressly excludes car-parking and non-attached storage, so a 950 m² shop with 100 m² of remote storage remains under 1,000 m² and inside the Act (s 5(a)).

Section 6A(2) is a trap: once continuous possession exceeds one year through any combination of leases or hold-overs, the Act applies from that day forward and to all succeeding leases without interruption. The disclosure-statement obligations in ss 11–12A do not apply to the first such lease but do apply to every subsequent one (s 6A(3)). A holding-over clause that operates only with the consent of both parties does not count as an extension right for the purposes of the short-term lease exclusion (s 6A(7)).

The assignor-release mechanism in s 41A is elective. If the assignor fails to give the Sch 2A statement and disclosure confirmation to the lessor before assignment, the statutory release from future liability is lost even if the assignee is solvent. The lessor’s updated disclosure statement obligation (s 41(d)) is triggered only by a request; many solicitors forget to make the request, leaving the assignee without statutory protection.

Section 31(1)(d) requires the lessor to supply, within 14 days of a valuer’s request, information about comparable leases in the same building or centre. Failure allows the valuer to apply to the Tribunal for an order (s 31(3)). The 2017 amendments added a parallel right for the parties to make written submissions to the valuer (s 31(1B)), yet many valuers still refuse to accept them on the mistaken ground that the process is purely inquisitorial.

The sinking-fund cap in s 25A(4) ($250,000) is an absolute prohibition; a lessor who requires or accepts contributions once the fund exceeds that figure commits a 50-penalty-unit offence. The obligation to repay sinking-fund contributions on destruction or cessation of the centre (s 25B) survives a change of lessor; an incoming purchaser inherits any shortfall caused by the vendor’s earlier misapplication (s 25(d)).

Finally, the online retail bond service (s 16WA) cannot be mandated; a lessor who insists on its use commits a 50-penalty-unit offence. Many standard-form leases still contain such clauses.

For lessors and their solicitors:

1. Use the exact Sch 2 form (or one “substantially to the same effect”—s 11(1)(d)) and complete every item relevant to the premises. Attach the retail tenancy guide. Retain proof of delivery at least seven days before the lease is entered into (s 11(1)).

2. For assignments, respond to a request for an updated disclosure statement within 14 days (s 41(d)). If the assignor wants statutory release, insist on receiving both the Sch 2A assignor statement and the signed disclosure confirmation before consenting.

3. Before accepting a security bond, prepare the approved-form notification. Deposit the exact sum with the Secretary within 20 business days (s 16C). Use the online service where possible but never mandate its use.

4. When preparing outgoings estimates (s 27) and statements (s 28), itemise under the same headings used in the disclosure statement. Engage a registered company auditor for the s 28 report and give the lessee the statutory opportunity to make written submissions to the auditor (s 28(2)). The same process applies to advertising statements (s 55(3)).

5. For rent reviews, instruct a specialist retail valuer from one of the four nominated lists (s 32B(2)). Supply the valuer with all comparable-lease data within 14 days (s 31(1)(d)). Advise the valuer in writing of the lessee’s right to make submissions (s 31(1B)).

6. When carrying out works that may disturb trading, give at least two months’ written notice (s 33) and consider offering the s 34(3) statement of anticipated disturbance to limit compensation exposure. For relocation or demolition, ensure the lease contains the exact clauses required by ss 34A and 35 and that any notice complies with the minimum periods and offers prescribed in those sections.

7. Maintain separate sinking-fund accounts, keep full records (s 25(g)), supply audited statements within three months after each accounting period (s 25(h)), and never allow the fund to exceed $250,000 before stopping contributions (s 25A(4)).

For lessees and their solicitors:

1. Insist on receiving both the lessor’s disclosure statement and the retail tenancy guide before negotiations begin. Do not sign anything until the seven-day period has elapsed.

2. Complete and return the lessee disclosure statement (Part B of Sch 2) within seven days, or negotiate a longer period in writing. Be accurate; a false statement can be treated as a representation by the lessee to the lessor (s 10(2A)).

3. For assignments, obtain an updated lessor disclosure statement and the assignor’s Sch 2A statement. If the assignor has complied with s 41A, the original lessee is released from future liability.

4. When a rent review or assignment triggers a valuation, make written submissions to the valuer within the time allowed and insist that the valuer confirm receipt. If the determination appears manifestly erroneous, apply to the Tribunal within 21 days for review under s 32A.

5. If outgoings or advertising statements are late, issue a written request and withhold payment until they are supplied (ss 28A, 55A). Keep a diary note—interest and late fees cannot be recovered on withheld amounts.

6. Record all pre-lease representations in the lessee disclosure statement (Sch 2 Part B item 5). Any oral assurance not recorded there will be difficult to rely upon later.

7. On termination or assignment, demand return of the original bank guarantee within two months (s 16BA). If the lessor cannot return the original, insist on a formal deed of release or bank consent to cancellation and claim compensation for any finance costs incurred.

Compliance is best achieved by using the prescribed forms without deviation, retaining dated delivery records, and treating the Act as a statutory code that cannot be contracted out of. Where doubt exists, obtain a Tribunal declaration under s 72(1)(f)(iii) before the lease is executed; the cost is modest compared with the compensation or termination rights that can arise from non-compliance.