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ARTICLE · 16 AUGUST 2019

Leases falling out of Retail Leases Act 2003 (Vic)

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The VCAT decision confirms that retail premises leases can 'jump out' of the RLA if occupancy costs exceed the threshold.

AustraliaReal Estate and Construction
Richard Skopal
Richard Skopal
Chris Brodrick
Chris Brodrick
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A recent VCAT decision has confirmed that retail premises leases can 'jump out' of the Retail Leases Act (RLA) if occupancy costs exceed the $1 million threshold during the lease term. The decision contradicts previous assumptions that if the RLA applies to a lease at its commencement, it will continue to apply until the term expires.

Section 11 of the Retail Leases Act 2003 (Vic) provides that the RLA applies to a retail premises lease that is entered into after the commencement of section 11 (ie after 1 May 2003) or renewed after if the lease was entered into before that date. Section 11(2) states further that the RLA only applies to a lease if the premises are retail premises at the time the lease was entered into.

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