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ARTICLE · 25 JUNE 2021

Valuer and Retail Leases Update: Lease or Licence?

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VCAT held that, by a review of the agreement, the intention of the parties was to create a licence and not a lease.

AustraliaReal Estate and Construction
Rohan Ingleton
Rohan Ingleton

In Brief

Whether a document is a lease or licence, will depend on a review of the document. If drafted appropriately, a document that purports to be a licence should in fact be a licence. If a licence is terminated by the owner, or its immediate licensor, a licensee may be entitled to seek relief against forfeiture (ie be put back in possession of the premises) at VCAT, but only if the owner or licensor has acted unconscionably.

What you need to know

If a document is called a “licence”, it may be a lease at law, which gives an occupant increased rights. For example, the Retail Leases Act 2003 (Vic) may apply and the occupant may be entitled to seek relief against forfeiture at law. In such circumstances, legal advice is required as to whether the document is a lease, or a licence.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.

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