A landlord may wish to relocate a tenant for a variety of
reasons. With a view to maintaining a harmonious relationship
between the parties, a landlord would normally seek to reach
agreement with its tenant so that the relocation takes place on a
co-operative basis. However, when the parties cannot reach
agreement and the relocation clause in the lease must be triggered,
the implied provisions in the Retail Shop Leases Act require the
landlord to give the tenant certain information before the
relocation notice is effective. Specifically, the relocation notice
must give the tenant:
details of the proposed refurbishment, redevelopment or
extension of the Centre ("the proposed works");
details of the "reasonably comparable" alternative
the date by which the tenant must vacate
Simple? Probably not because there is likely to be an element of
uncertainty over whether there is a "genuine proposal" to
carry out the proposed works or whether the alternative premises
are "reasonably comparable". If the tenant disputes the
validity of your relocation notice then you may find yourself in
the Tribunal. There are no apparent limits on what the Tribunal may
take into account when considering what constitutes a "genuine
proposal" or what is "reasonably comparable".
Some recent decisions under equivalent retail leases legislation
in Victoria and NSW have provided useful guidance as to how the
Tribunal may interpret the implied provisions in the Retail Shop
1. Details of the proposed works
There must be enough details in the relocation notice so that
the affected tenant can come to a conclusion about whether the
are a "genuine proposal";
will be carried out within a reasonably practicable time after
the tenant is relocated; and
cannot be carried out without vacant possession.
Consequently, we recommend that you provide as many details of
the proposed works as you can when giving a relocation notice.
2. Details of the "reasonably comparable alternative
The relocation notice must give the tenant enough details about
the alternative premises so that it can form a view as to whether
the alternative premises are "reasonably comparable" to
the existing premises. Apart from the obvious details like size,
location and any adjusted rent, the Tribunal may also consider the
commercial value, exposure to traffic, or general appearance of the
alternative premises to determine whether they are "reasonably
The minimum information that should be set out in a relocation
the size, layout and location of the alternative premises
(preferably shown on detailed plans);
the proposed rent (if it is to be adjusted to take account of
the different commercial value of the alternative premises);
any unusual or distinguishing features of the alternative
any information of special relevance to a particular tenant
(e.g. a food retailer should be given information about the
location and size of any grease trap servicing the alternative
3. The date by which the tenant must vacate
The relocation notice must be given at least 3 months before the
tenant is required to relocate. As always, it is best to issue the
notice as early as possible. The closer it is to the commencement
of the works, the stronger the bargaining position of the tenant if
the notice is defective.
Generally, you should also ensure that the relocation notice is
given to the tenant in the manner provided for in the lease. When
posting, you should allow a minimum of 2 business days for
delivery. Service by fax or email is not recommended unless
specifically provided for in the lease.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Many retail leases include a covenant to trade, requiring the tenant to open the premises for trade during certain hours.
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