The Retail Leases Act 2003 (Vic) sets out several key dates and processes that both tenants and landlords need to be aware of when renewing retail leases in Victoria. Missing these key dates can have serious consequences, and it is important to understand the lease renewal process thoroughly. Below we have set out some key points and dates to keep in mind:

Notice Period for Exercising Option: The lease will specify the latest date by which the tenant must give notice to the landlord if they wish to exercise the option to renew (Tenant’s Notice). This notice period is typically between 3 to 6 months prior to the lease expiry date. Failing to give notice within this timeframe may result in the tenant losing the right to renew.

Landlord's Notice to Tenant: Notwithstanding the tenant’s requirement to give the Tenant’s Notice, the landlord must provide the tenant with written notice of the tenant’s latest date to renew the lease at least 3 months prior to the deadline for the tenant to give their notice (Landlord’s Notice). The Landlord’s Notice must include details such as:

1. the date by which the option to renew the lease must be exercised by the tenant;

2. the rent payable for the first 12 months of the renewed lease;

3. the availability of an early rent review;

4. the availability of a cooling off period; and

5. any changes to the most recent disclosure statement (but for the new proposed rent).

If the landlord fails to provide the Landlord’s Notice, the tenant's latest date to renew the lease will be extended until 6 months after the date that the Landlord’s Notice is given .

Obligation to Renew: In most circumstances, a landlord is obliged to renew the lease if the tenant has exercised the option correctly. There can be exceptions, such as where a tenant has regularly been in default of the lease throughout the term.

Early Rent Review: A tenant can request an early rent review by giving notice to the landlord within 28 days of receiving the Landlord's Notice. If an early rent review is requested, the latest date to renew the lease is extended to be 14 days after the date that the tenant is notified of the rental determination.

Cooling Off Period: If the tenant exercises the option to renew and has not requested an early rent review, they have a 14-day cooling off period starting from the date of exercising the option, during which they can change their mind. If the tenant has changed their mind and no longer wishes to proceed with the renewal, a cooling off notice must be given to the landlord.

No Option to Renew: If the lease does not contain an option to renew, the landlord must give the tenant notice either offering a renewal of the lease or informing them that no renewal will be offered. This notice must be given at least 6 months but no more than 12 months prior to the lease expiry date. Failure to provide this notice will result in the lease expiry date being extended to be 6 months from the date that the notice is given to the tenant by the landlord.

The process of renewing a retail lease in Victoria involves multiple key dates that must be carefully followed to protect the rights of both tenants and landlords. Missing these critical dates can have serious consequences, and it is important to seek professional advice and assistance if needed. At all times, it is essential to be vigilant, understand the lease terms, and ensure compliance with the Retail Leases Act 2003 to avoid any potential legal issues.

Further Information:

If you have any questions or concerns about lease renewal processes, our team at Legal Synthesis is ready to provide guidance and support.

DISCLAIMER:

The information in this article is of a general nature. It does not constitute formal legal advice, and should not be relied on as such. If you are seeking legal advice about a specific matter please contact us to discuss.