In brief

A landlord should check as to whether it has provided the required notice under section 28(1A) of the Retail Leases Act 2003 (Vic) (the Act).  A notice provided in the past may not be sufficient and a new notice may need to be given.

What you need to know

A new section 28(1A) notice under the Act should be given to a tenant, where there is a retail premises lease in effect, unless the last date to exercise the option to renew the lease was prior to 31 December 2020.

Background

Under section 28 of the Act, as amended by the Retail Leases Amendment Act 2020 (Vic) (Amending Act) (which came into force on 1 October 2020), where a lease contains an option for a further term, a landlord is required to give to a tenant certain information at least three months before the option to renew the lease may be exercised, including the last date to exercise the option to renew the lease for a further term.

Section 28 of the Retail Leases Act 2003 (Vic) (prior to the Amending Act) provided that notice of the last date to exercise an option must be given to a tenant at least six months and not more than 12 months before that date.

But, what if a lease was in place prior to the commencement of the Amending Act? Section 125 of the Act provides as follows:

The amendments made to this Act by section 12 of the Retail Leases Amendment Act 2020, apply to a retail premises lease entered into and in operation immediately before the day on which that section comes into operation (unless there are less than three months before the last date that the option to renew the lease may be exercised).

Section 12 of the Amending Act provides for certain information to be provided to the tenant as per section 28 of the Act, including the last date that the tenant is required to exercise an option for a further term (where the lease contains a further term).

So, if there was a retail lease in place prior to 1 October 2020, which contains an option for a further term and the last date to exercise the option is after 31 December 2020, then the new section 28(1A) applies. This means that a landlord is required to comply with section 28(1A) of the Act and may need to again notify the tenant of the last date to exercise the option for the further term, at least three months before that date, as well as provide the other information under section 28 of the Act.

Conclusion

Landlords should ensure that the correct notice is given to a tenant under a retail lease.

About the Author

Rohan Ingleton

Partner
A telecommunications and retail leasing expert, Rohan is a property specialist with an enviable reputation.

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