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New end-of-lease guidance for retail tenants

14 August 2023 | By Victorian Chamber of Commerce & Industry

Retail tenants need to take important steps to prepare for the end of their lease to meet responsibilities and avoid issues. The Victorian Small Business Commission (VSBC) has developed new guidance to help retail tenants prepare for end of lease.

What you need to know

If there are no further options to renew the lease, the landlord must notify you in writing within six to 12 months of the date the lease expires to let you know whether they will offer a lease renewal or not.

If an option exists, the landlord must notify you of the last date you can exercise the option at least three months before that date.

Where the lease isn’t going to be renewed, unless the lease provides otherwise, the tenant doesn’t need to give notice before vacating the premises on the last day of the lease. However, it’s a good idea to start communicating early with your landlord about the process.

Some expired leases are followed by monthly agreements (or ‘holding over’), where you or your landlord can end the tenancy at any given time following a month’s written notice by either party – unless you have a written agreement for a different notice period.

Top Tips

Top end-of-lease tips from the VSBC include:

  • Understand your requirements when it comes to giving notice – it’s important to check these with your landlord or agent to make sure you’re not liable for any additional rent
  • Make sure you understand ‘make good’ requirements, for example, you might have an obligation to remove the fit-out, repair any damage above fair wear and tear or return the premises to the condition it was in at the start of the lease – if you’re not sure, check with your landlord or agent
  • Ask for an early inspection – this gives you time to remove or repair anything that will impact your ability to make good
  • Keep conversations or agreements about the state of the premises in writing
  • Prepare a full inventory of all fit-outs and fixtures at the premises and share this with your landlord or agent
  • Confirm with your landlord or agent and service providers when essential services should be disconnected
  • Check your records for all rent and outgoings paid throughout the tenancy – crosscheck these with your landlord or agent early on so there are no surprises after you vacate the premises
  • Make sure you’re across your rights – Once your lease has ended and you have met all your obligations, your landlord must give you back your security deposit within 30 days along with any interest earned, and must also account for the interest.
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