ACT
See section 104. The tenant has a right to extend the term to 5 years if the "total term" of the lease is less than 5 years, and the tenant was not (before entering lease) advised independently about the effect of section 104 and extension of the lease is not:
- inconsistent with the terms of a head lease; or
- unlawful.
The tenant may, no later than 90 days before the end of the term of the lease exercise the right of extension by written notice to the landlord.
NSW
Section 16 of the Act no longer prescribes a minimum 5-year term. Previously, a retail shop lease could not be less than 5 years, unless the landlord was given a certificate from a lawyer or licensed conveyancer certifying that the minimum 5-year term did not apply.
NT
See section 26. There is a minimum 5 year term. The term includes any options for extension or renewal unless the option is entered into / conferred after the retail lease is entered into. A lease in contravention of this section is extended by the period necessary to increase the term to 5 years.
This section does not apply:
- where the tenant obtains a certificate from a legal practitioner or accountant not acting for the landlord certifying that he has explained the effect of a reduction in the lease term;
- where the lease is resulting from the renewal of an earlier lease in accordance with an option under that lease, only if there was no break in the entitlement of the tenant to possession of the retail shop and the option was granted by that earlier lease or an agreement entered into before or at the same time as the earlier lease; or
- where a 5-year term would be inconsistent with the terms of a head lease under which the landlord holds the retail shop.
QLD
No prescribed minimum term.
SA
See sections 20B and 20K. Minimum 5-year term. "Term" assumes any right of renewal will be exercised. But a right of renewal given after the lease is entered into will not be considered. However, the section does not apply to:
- a lease containing a certified exclusionary clause (a certificate signed by a lawyer to the effect that the effect of the minimum term provision has been explained, and that the tenant gave assurances that the tenant was not acting under coercion or undue influence);
- a fixed term lease of 6 months or less;
- a lease arising from holding over with the consent of the landlord for a period which does not exceed 6 months;
- a tenant who has been in possession for at least 5 years;
- a sublease where the term is as long as the head lease allows; and
- a lease excluded by regulation.
TAS
See sections 10(3)-10(4). Minimum 5-year term. Except where a tenant obtains a certificate from the tenant's legal adviser certifying that he has explained to the tenant the effect of a reduced lease period.
VIC
See section 21. The term of a retail premises lease (including any further term) must be at least 5 years or if the term remaining under any head lease under which the landlord holds the premises is 5 years or less, the length of that remaining term less 1 day. This does not apply if the tenant or prospective tenant, obtains a certificate from the SBC which certifies in writing that the effect of the section and the certificate have been explained to the tenant or prospective tenant and the tenant or prospective tenant provides to the landlord a copy of the certificate of the SBC.
The SBC must consider a request made within 90 days after entry into the lease and has the discretion to consider a request made outside that time.
WA
See section 13. Provisions are complex and differ markedly from other States. Within WA they also differ depending on whether the lease is:
- an Existing Lease – being a lease entered into before 1 January 2013 or pursuant to an option that was originally granted in a lease entered into before 1 January 2013; or
- a New Lease – being one entered into on or after 1 January 2013 (including an Existing Lease that is amended on or after 1 January 2013 in such a way that it becomes a New Lease at law eg. due to a change in area of the premises whether by way of surrender or addition of more area).
Prior to the 2013 Amending Act, section 13:
- gave the tenant a right to a statutory option to renew (as long as the tenant was not in default or a statutory option would not be inconsistent with the landlord's rights as tenant under any head lease) if the aggregate term granted to the tenant (taken with any option to renew contained in the lease) gave the tenant less than 5 years possession. The right had to be exercised 90 days before the end of the term granted or such longer period as WA SAT in its discretion allowed.
- except for default, prevented the landlord from ending the lease before the tenant had an aggregate of 5 years' continuous possession of the premises (unless the tenant failed to exercise the statutory option in time or a statutory option was inconsistent with the landlord's rights as tenant under a head lease).
- in calculating whether the tenant had had 5 years' possession, enabled regard to also be had to immediately prior possession by the same tenant of the same premises under prior leases.
- where the lease was assigned and provided there were no amendments in the assignment deed effecting a re-grant, gave the assignee only the rights the assignor had in respect of that lease to 5 years' possession – no more and no less.
- if the landlord wished to grant the tenant a retail shop lease for an aggregate term being less than 5 years without a statutory option arising, the tenant (of the tenant's own free will) would first need to apply to the SAT and obtain from SAT an order that the statutory option would not arise: (section 13(7b)). Those orders are periodically difficult to obtain from SAT.
Section 13 in its application to New Leases is similar to the unamended section 13 except that:
- a statutory option will now not arise to a short-term tenancy provided that the tenant has not had continuous possession of the premises for an aggregate term exceeding 6 months.
- to stop rolling monthly tenancies being used to get around section 13, the time for exercising the statutory option is reduced to 30 days before the end of the term.
- further, regard also needs to be had to the obligation in section 13C placed on the landlord by the 2013 Amending Act to give the tenant notice of the last day for exercising an option to renew – expressly including a statutory option to renew – otherwise that latest date for exercise is extended.
- most importantly, section 13 no longer applies to redevelopment/ relocation clauses in New Leases. Those are now governed by substantially more tenant friendly provisions in section 14A (as inserted by the 2013 Amending Act). See detailed discussion below concerning section 14A in "Relocation".
- where a lease is an Existing Lease, section 13 (as it was drafted before the 2013 Amending Act) continues to govern landlord early break rights for redevelopment/ relocation as well for other reasons (eg. total or partial destruction) and has the effect that:
- if WA SAT did not approve the inclusion of the early break clause in the Existing Lease – the landlord can simply wait until the tenant has had an aggregate of 5 years continuous possession of the premises (including any prior lease possession) then terminate the Existing Lease on not less than 6 months' notice without offering a new lease nor paying the tenant compensation (unless the parties had contractually agreed otherwise); or
- where WA SAT approved the early break clause (which according to WA SAT policy at the time would have required some form of compensation but no obligation to offer a new lease) – the landlord can terminate the Existing Lease before the tenant has had an aggregate of 5 years continuous possession of the premises on not less than 6 months' notice.
Whether a lease is an Existing Lease or a New Lease:
- The SBC does not take over the role of SAT in relation to early break clauses – that role remains with SAT.
- There is no ability in WA to get a statement from the tenant, licensed conveyancer or tenant's lawyer contracting out of section 13.
Definitions and currency