Contents
Stepping into the world of retail in Victoria is an exciting move – whether you’re launching a boutique clothing shop, opening a new café, or expanding your services into a bustling strip mall. A well-placed retail business can be the foundation of long-term success, but before you hang your “open” sign, nailing down your legal requirements is vital.
If you’re looking to secure a retail lease in Victoria, you’re already making a smart commitment to a space with foot traffic and market presence. However, understanding your legal obligations under the Retail Leases Act 2003 (Vic) and getting your compliance right from day one can make the difference between building a stress-free business or facing headaches down the track.
We get it – the legal side of business can feel daunting. But with clear steps and the right guidance, you can lay strong foundations for your retail venture. In this guide, we’ll break down what a retail lease in Victoria involves, your key legal requirements, and which documents you’ll need to get started – so you can focus on growing your business, not worrying about avoidable legal risks.
What Is a Retail Lease in Victoria?
A retail lease is a special type of commercial leasing arrangement designed for businesses selling goods or services directly to the public in Victoria. These leases are governed by the Retail Leases Act 2003 (Vic) (“the Act”), which sets out rules to protect both landlords and tenants, ensuring a fair and transparent process from negotiation to exit.
Retail leases most often cover premises in shopping centres, high streets, or local strip shops, but some office spaces or service providers may also fall under the Act. It’s essential to determine whether your intended premises qualifies as a “retail premises” under Victorian law before you sign the lease.
Common types of businesses that use retail leases in Victoria include:
- Cafés, restaurants, and takeaway shops
- Clothing and specialty retail stores
- Hairdressers, nail salons, and barbers
- Beauty, wellness, and fitness studios
- Small services open to the public (e.g. repair shops, dry cleaners)
If you’re unsure whether your business arrangement is classified as a retail lease, seeking advice before committing is a wise move. The law can get technical when exceptions apply, such as for premises above certain rent thresholds or for “big box” anchor tenant leases.
Do I Need a Retail Lease to Operate My Business?
Generally, if you’re operating out of commercial premises and providing goods or services directly to the public, a retail lease is the standard agreement you’ll use.
However, not all commercial premises leases are “retail leases.” Some businesses, particularly those not selling to the public (like warehouses or some professional offices), may instead use a commercial lease agreement outside the Act.
The distinction matters because the Retail Leases Act 2003 (Vic) gives retail tenants extra protections – including specific disclosure requirements, caps on bond amounts, rules about rent reviews, and processes for resolving disputes. Before agreeing to lease terms, make sure the lease is clear about whether the Act applies, and that the document is tailored to Victorian retail law – using an outdated or generic lease can expose you to risk.
How Do I Secure a Retail Lease in Victoria? A Step-by-Step Guide
Let’s walk through the key steps you should take from the moment you start considering a retail premises, right through to signing your lease and moving in.
1. Do Your Homework and Plan Carefully
- Location: Does the spot have enough foot traffic and visibility for your business type?
- Budget: Consider not just the rent, but outgoings, fit-out costs, marketing, and utilities.
- Lease Term: What length of lease do you need to support your business goals?
- Fit-Out Requirements: Can the premises accommodate your set-up (e.g. kitchen, accessible bathrooms)?
- Permitted Use: Make sure your intended activity is allowed under local council rules and the lease itself.
Document your ideas in a simple business plan – it’ll help focus your negotiations and clarify your budget and legal needs.
2. Obtain Council and Statutory Approvals
- Local Council Permits: Check zoning, signage, health, and building usage approvals are in place. For food businesses, health permits are usually required.
- Liquor or Special Licences: Required if you sell alcohol, tobacco, or regulated goods. See guides on applying for a liquor licence in Victoria.
- Other Requirements: For alterations or renovations, you may need a building permit. Always confirm what’s necessary in your area, as these are not always covered by the landlord.
3. Review and Negotiate Your Lease Terms
Never sign a retail lease without a thorough review. The main elements you need to watch out for are:
- Rent Amount and Reviews: How is rent calculated? Are there scheduled increases, and by what method?
- Lease Term and Options: How long does the lease last, and do you have the right to renew?
- Fit-Out and Make Good: Who pays for the initial fit-out and what do you need to do when you leave?
- Outgoings: Which costs are you responsible for (e.g. utilities, rates, cleaning, repairs)?
- Signage and Use: Are there restrictions on what signage you can display or how you operate?
At this step, it’s a good idea to consult a legal expert – having a commercial lease lawyer review your documents can help prevent costly misunderstandings or unfair terms.
4. Ensure Compliance with the Retail Leases Act 2003 (Vic)
The Act sets out special requirements to protect retail tenants, including:
- Disclosure Statement: The landlord must provide a written disclosure statement at least 14 days before the lease starts, detailing key terms, costs, and obligations.
- Minimum 5-Year Lease/Option: Generally, retail leases must allow tenants at least 5 years’ occupation (including any options). You can legally waive this with a certificate – but get advice first.
- Rent Reviews: The Act limits the types of rent review (e.g. fixed, CPI, market review) and bans ratchet clauses (which prevent rent from dropping).
- Security Deposit (Bond): The landlord must hold any bond in a separate account and return it promptly at lease end, unless they have a valid claim.
- Outgoings Transparency: Landlords must specifically outline all outgoings, so there are no surprise costs.
- Assignment & Sale: There are set rules for assigning your lease if you sell your business.
These protections give you negotiation power and peace of mind – but only if you know your rights.
5. Finalise and Execute the Lease
Once both parties agree on the terms and requirements, the formal lease is signed. If any conditions must be met (such as council approvals or fit-out completion), ensure these are clearly specified in a side letter or as special conditions within the lease.
Keep a copy of your signed lease and all correspondence safe, as you’ll need these if disputes arise or when you move out.
What Laws and Regulations Do I Need to Follow as a Retail Tenant in Victoria?
Beyond your lease agreement, running a retail business in Victoria means navigating a range of state and federal laws. Here’s a basic checklist to ensure you’re covering your bases:
Retail Leases Act 2003 (Vic)
This Act is the main law for retail leasing in Victoria. It covers your rights, obligations, and dispute resolution processes. If your premises fall under the Act, both you and the landlord must adhere to its requirements, regardless of what your lease says. You can read a detailed breakdown of its application here, but your legal advisor can clarify any grey areas.
Consumer Law (Australian Consumer Law – ACL)
You must comply with the Australian Consumer Law for all sales and customer dealings – including advertising, returns, and warranties. Misleading conduct, unfair contract terms, and failure to provide refunds where legally required can lead to substantial fines and loss of trust.
Employment Law & Workplace Safety
If you’re employing staff, you’ll need to adhere to the Fair Work Act 2009 and other workplace laws:
- Issue compliant employment contracts
- Pay correct award wages and entitlements
- Implement workplace health and safety policies
- Comply with leave, superannuation, and record-keeping requirements
You can read more on these requirements in our guide to workplace health and safety.
Privacy and Data Protection
If your business collects any personal information (such as online bookings or loyalty programs), you may need a compliant Privacy Policy that sets out how data is collected and used. The Privacy Act 1988 (Cth) applies to most businesses with a turnover of $3 million or collecting sensitive data.
Other Industry-Specific Laws
Special rules may apply for some businesses – for example, food businesses must comply with local food safety regulations, salons may require health and hygiene licences, and businesses selling certain regulated items (like tobacco or alcohol) need additional approvals. Check your industry’s requirements or speak with a legal advisor for tailored advice.
What Legal Documents Should I Have for My Retail Lease in Victoria?
Setting up with the right legal documents means smoother operations and less risk of costly disputes. Here are the essentials:
- Retail Lease Agreement: The formal contract detailing your rights and obligations as tenant – this must align with the Retail Leases Act 2003 (Vic). You can read more about what makes a strong lease here.
- Disclosure Statement: Provided by the landlord, this document outlines key lease facts and projected costs – review it carefully before signing.
- Personal or Director’s Guarantee: In some cases, landlords may require a personal guarantee from business owners, especially for company tenants.
- Fit-Out Deeds or Side Agreements: These clarify who pays for changes to the premises and what happens to fixtures when you leave.
- Employment Contracts: If you employ staff, legally compliant agreements are a must – protecting both your rights and those of your team.
- Workplace Policies: Including anti-discrimination, bullying, health and safety, and clear procedures for staff management.
- Privacy Policy: Required for businesses collecting or storing personal data, whether online or in store.
- Website Terms & Conditions: If you sell online or have a website, these set the rules for customers and reduce your liability. Consider a website terms and conditions template tailored to your business.
- Supplier & Franchise Agreements: If you rely on exclusive suppliers or are operating under a franchise, have these contracts reviewed to ensure all parties’ rights and responsibilities are clear.
Not every business will need every document, but almost all will require a combination of these – getting advice about which contracts are best suited to your setup is a sound investment.
Common Pitfalls and Tips for Retail Leasing Success in Victoria
Plenty of businesses run into problems with their lease – but most issues can be avoided with careful planning and the right support. Here are some common headaches and how to steer clear:
- Not Reviewing the Disclosure Statement: Rushed reviews can blindside you with high outgoings, hidden fees, or special conditions. Always read thoroughly and ask questions.
- Ambiguous “Make Good” Clauses: Vague obligations for end-of-lease repairs or fit-out removal catch many tenants off guard – seek clarity on your responsibilities before signing.
- Poor Planning for Lease Exit or Assignment: If you can’t sell the business or assign the lease easily, you could be stuck paying rent even if you’ve stopped trading. Make sure the lease sets out a clear process for transferring to a new tenant.
- Unclear Use or Fit-Out Rights: If you plan to change your business activity or remodel, ensure you can do so legally – check the “permitted use” and fit-out clauses.
- Failing to Document Everything: Verbal promises hold little weight; always confirm key terms and negotiated changes in writing, either within the lease or as a signed addendum.
And remember – if you’re ever unsure, a quick conversation with a retail lease legal expert can save you from costly mistakes.
Can I Buy an Existing Retail Business or Take Over a Lease?
Yes – buying an established business or taking over an existing lease (“assignment of lease”) can be an attractive way to hit the ground running. However, you’ll need to do your due diligence: review the lease, check the current rent and terms, and ensure all council approvals are transferable. For more on buying a business, check out our comprehensive business purchase guide.
Key Takeaways
- Retail leases in Victoria are governed by the Retail Leases Act 2003 (Vic), offering special protections to tenants and setting clear rights for both parties.
- Careful planning and legal review are essential before signing any lease – especially around rent, outgoings, use, and exit rights.
- Comply with all relevant laws, including consumer law, employment law, and local council regulations, from day one.
- Put in place the right legal documents such as your retail lease, employment agreements, privacy policy, and additional contracts tailored to your operations.
- Common pitfalls such as ambiguous lease clauses or missed permits can be avoided by working with experienced legal advisors at the outset.
- Regularly review your compliance obligations as your business grows or your premises use changes to ensure you remain protected.
If you would like a consultation on starting or leasing a retail business in Victoria, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat. We’re here to help you build your business with confidence – so you can focus on your customers, not compliance hassles.
Meet Our Lawyers for Commercial Leases
Get in touch now!
We'll get back to you within 1 business day.
Book in a free consultation with us to discuss your legal needs.