What are the consequences of renewing a “retail premises lease” where the lease (as renewed) is not a “retail premises lease”?

This post is a revised version of a post published on 7 November 2025. Please ignore the earlier post.

If a lease is a “retail premises lease” governed by the Retail Leases Act 2003 (Vic) but upon renewal the lease is not a “retail premises lease”, is the renewed lease affected by the lease having been a “retail premises lease” before the renewal?

Whether or not a lease is a “retail premises lease” is determined at the date the lease is entered into and, if at that date the lease is a “retail premises lease”, the lease cannot cease to be a “retail premises lease” during the lease term: Richmond Football Club Ltd v Verraty Pty Ltd [2019] VSC 597 (Verraty); affirmed in [2020] VSCA 267 (Verraty Appeal).

Where a lease is a “retail premises lease” terms are implied into the lease by sections of the Act which include the words “a retail premises lease is taken to provide as set out in this section”: see for example ss46 – 48 and 52-57. Where any term in the lease is inconsistent with or contrary to a term implied by the Act, that lease term is void to the extent that it is contrary to or inconsistent with the term implied by the Act: s.94(1).

The Act also makes void certain lease provisions. For example, s50 says that a provision of a retail premises lease is void to the extent that it makes the tenant liable to pay an amount for which the landlord is liable to pay land tax.

When a “retail premises lease” is renewed but the renewed lease is not a “retail premises lease”, two questions arise:

• do the terms implied into the “retail premises lease” by the Act appear in the renewed lease; and

• are provisions in the “retail premises lease” made void by the Act “revived” in the renewed lease?

In Verraty Croft J did not have to consider the consequences a “retail premises lease” being renewed where the renewed lease was not a “retail premises lease”. But His Honour helpfully addressed the issue. The Court of Appeal in the Verraty Appeal did not address the issue. 

Croft J said at [75] that:

The position with respect to the provisions of a renewed lease depend, in general terms, on the provisions for renewal, if any, contained in the lease which is being renewed.

Subject to a number of exceptions which are not relevant to this post, the lease in Verraty provided that the renewed lease:

shall be subject to the same covenants, conditions, agreements, stipulations and providers contained in this Lease

Croft J held at [77] and [78] that were the lease to be renewed by the exercise of an option and the renewed lease was not a “retail premises lease”, the lease provisions implied into the lease by Act remained in the renewed lease. Accordingly, provisions such as ss.46 - 48, 52- 57 of the Act, which imply terms into the “retail premises lease”, would remain in the lease as renewed.

This means, for example, that the term implied into a "retail premises lease" by s.52(1) and 2(a) requiring the landlord to maintain the structure of and fixtures in the "retail premises" in a condition consistent with the condition of the premises when the "retail premises lease" was entered into, would remain in the renewed lease. 

His Honour noted that this result could be avoided by including terms in the lease which – for example - provided that when the Act ceased to apply provisions implied into the “retail premises lease” by the Act ceased to have any effect.

While His Honour did not address directly whether provisions of a “retail premises lease” made void by the Act would be revived in the renewed lease, it is likely that the reasoning involved in determining that implied terms remained in the renewed lease would also apply to terms made void: because the renewed lease was on the same terms as the “retail premises lease” the terms made void by the Act would not appear in the renewed lease. Thus, a tenant which was not liable to pay land tax under the "retail premises lease" because of s.50, would also not be liable to pay land tax under the renewed lease which was not a "retail premises lease". This result could be avoided by including terms in the lease which provide that provisions made void by the Act are revived in a renewed lease which was not a "retail premises lease".

This post originally apeared on https://roberthaykc.blog