Recovering unpaid rent from a commercial tenant is not the same as recovering a trade debt. The process is shaped by the lease itself, the type of premises, and — critically — whether the Retail Leases Act in the relevant state applies. Getting this wrong can result in a formal process being set aside or a dispute being referred to a tribunal instead of a court of the landlord's choosing.
The retail vs non-retail distinction
Each Australian state has its own retail leasing legislation. In New South Wales, it is the Retail Leases Act 1994 (NSW). In Victoria, the Retail Leases Act 2003 (Vic). In Queensland, the Retail Shop Leases Act 1994 (Qld). In Western Australia, the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA). These Acts apply to leases of retail premises — broadly, premises used primarily for the sale of goods or services to the public — and create rights and obligations that override the lease terms in many circumstances.
Non-retail commercial leases — offices, warehouses, industrial premises — are governed primarily by the terms of the lease itself, with fewer statutory overlays. The distinction matters because retail tenants have statutory rights (minimum lease terms, disclosure obligations, dispute resolution rights) that affect how a landlord can proceed.
Formal notice requirements
Most lease agreements and retail leasing legislation require a landlord to serve a formal notice of default before taking action for arrears. The form, content and service method for this notice are usually specified. In many cases, the notice must allow the tenant a cure period — typically 14 days — to remedy the default before the landlord can exercise further rights. A notice served in the wrong form, to the wrong address, or without the required content may not constitute valid service — and may restart the clock entirely.
QCAT, VCAT and equivalent tribunals
Retail lease disputes in Queensland are heard by the Queensland Civil and Administrative Tribunal (QCAT). In Victoria, the Victorian Civil and Administrative Tribunal (VCAT) has jurisdiction over retail lease disputes. In New South Wales, retail lease disputes are handled by the NSW Civil and Administrative Tribunal (NCAT) for smaller amounts, with the courts having concurrent jurisdiction for larger claims.
Many retail leasing Acts require the parties to attempt mediation before proceeding to tribunal. The relevant state body — the Small Business Commissioner in Victoria and South Australia, the Retail Tenancy Unit in NSW — typically facilitates this. Skipping the mediation step may result in a tribunal declining jurisdiction or costs being awarded against the party who failed to engage.
Outgoings and make-good disputes
Rent arrears are one category of commercial landlord claim. Disputes about outgoings contributions, incentive repayments and make-good obligations at lease expiry are others. Each category has its own legal basis in the lease and the applicable legislation. Make-good disputes in particular often involve significant amounts and are frequently contested.
Practical steps for landlords
- Identify whether your lease is retail or non-retail before taking any action
- Review the lease for the formal notice requirements and follow them precisely
- Check whether mediation is a prerequisite to tribunal proceedings in your state
- Keep records of all rent statements, invoices for outgoings and tenant communications
- Consider whether a guarantor exists and whether they have been formally notified of the default
If you have a defaulting commercial tenant and are unsure how to proceed, speak to Merion about the recovery options available in your state.