If you are a landlord of retail shop premises in Queensland (as
defined in the Retail Shop Leases Act 1994 (the Act)), you may not
be aware of the notification obligations that arise as your tenants
approach the end of the terms of their leases, or more
significantly, the potential consequences for failing to satisfy
these obligations. Your obligations in this regard arise
irrespective of whether the lease contains an option to renew or
not, and the consequence of failing to comply with the notification
provisions are different in either situation.
Under the Act, your obligations are as follows:
If a tenant has a right to extend the lease for a further term,
you are obliged to bring to your tenant's attention the date by
which they must exercise the option to extend the lease.
Written notice must be provided to the tenant not more than six
months, and not less than two months before the earliest date upon
which the tenant may exercise the option (section 46).
This obligation only arises for leases entered into after 3
April 2006. For leases entered into prior to this date, you are not
obliged to notify your tenants of the date by which the option must
be exercised by.
If a tenant does not have a right to extend the lease for a
further term, you are obliged to write to your tenant and
Offer your tenant a renewal or extension of the lease, with
such notice setting out the key commercial terms of the new lease;
Confirm that you will not be offering your tenant a renewal or
The timeframe for service of either notice is as follows:
For leases with a term of less than one year, not more than six
months and not less than three months prior to the expiry date of
For leases with a term of more than one year, not more than 12
months and not less than six months prior to the expiry date of the
If you fail to serve the appropriate notice upon your tenants,
the following penalties under the Act may apply:
Where the tenant has a right to extend the term under the lease
and you have not advised of the date by which they must exercise
their option, the maximum penalty is $4,000.
Where the tenant does not have a right to extend the lease but
has written to you prior to the expiry of the term asking for an
extension, and you have not complied with the above notification
obligations, the term of the lease is extended for a further six
months from the date after you serve notice upon the tenant.
Other States and Territories
If you own retail shops or retail shopping centres in other
States, you should note the following:
Similar provisions are contained in the corresponding New South
Wales, Northern Territory, Tasmanian, and Victorian
In Western Australia and the ACT, if the tenant writes to you
prior to the expiry of the lease seeking an extension of the lease,
you must respond to the tenant's request and confirm that you
will either offer an extension or not.
In South Australia, even if no option to extend exists under
the lease, you are obliged to first offer your tenant a renewal at
the expiry of the term before entertaining any other prospective
tenant/s for the premises. In this regard, you should always
presume that the tenant wants a renewal unless they write to you in
the 12 months prior to the expiry of the lease indicating that they
do not want a renewal. However, this obligation will not apply in
some limited circumstances.
The penalties for not complying with the notification
obligations vary from State to State.
DLA Phillips Fox is one of the largest legal firms in
Australasia and a member of DLA Piper Group, an alliance of
independent legal practices. It is a separate and distinct legal
entity. For more information visit
This publication is intended as a first point of reference and
should not be relied on as a substitute for professional advice.
Specialist legal advice should always be sought in relation to any
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