Commercial Lease Law in Tasmania: Overview

Tasmania is the only Australian state that still relies on a regulatory code rather than primary legislation to govern retail leases.

The Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998 set out the rules for retail lease agreements in Tasmania, covering minimum lease terms, rent reviews, disclosure requirements and dispute resolution.

The Retail Leases Act 2022 was passed to replace the Code, but as of October 2026, almost all of its provisions remain uncommenced.

Non-retail commercial leases in Tasmania are governed largely by common law, the Landlord and Tenant Act 1935 and the terms agreed between the parties.

This article explains the current legislative framework, the protections available to retail tenants, and what the Retail Leases Act 2022 will change once it takes effect.

What Legislation Governs Commercial Leases in Tasmania?

Commercial leases in Tasmania are governed by a combination of common law, the Conveyancing and Law of Property Act 1884, the Landlord and Tenant Act 1935 and, for retail premises, the Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998.

Tasmania does not have a single comprehensive commercial leasing statute that applies to all business leases.

Instead, the level of statutory protection a tenant receives depends mainly on whether the premises qualify as retail or non-retail.

Retail tenants are covered by the Code of Practice, which sets minimum standards for lease terms, rent reviews, disclosure and dispute resolution.

Non-retail tenants have fewer statutory protections, though they are not entirely without them.

The Conveyancing and Law of Property Act 1884 provides restrictions on forfeiture and relief against forfeiture, while the Landlord and Tenant Act 1935 covers matters including the recovery of rent and possession.

The Australian Consumer Law (Tasmania) Act 2010 also applies to commercial dealings in Tasmania, offering protection against unconscionable conduct, misleading or deceptive behaviour in lease negotiations, and unfair contract terms.

How Does the Code of Practice for Retail Tenancies Apply?

The Code of Practice for Retail Tenancies is a set of regulations made under the Fair Trading Act 1990 (Tas) that has been in force since 1998.

It applies to leases of premises used for businesses listed in Appendix C of the Code, as well as premises used for any business in a qualifying shopping centre, provided the lettable area is 1,000 square metres or less.

Clause 2 of the Code sets out specific criteria for which leases are covered and certain exclusions.

The Code sets out rules covering minimum lease terms, landlord disclosure obligations, rent review methods, outgoings, security deposits, assignment and subletting, lease renewal and termination, and dispute resolution.

It also prohibits key money and ratchet clauses, and makes harsh, unjust or unconscionable conduct by either party an offence.

Contravening the Code is a criminal offence carrying fines of up to 10 penalty units, with additional daily penalties of up to five penalty units for continuing offences.

Since 14 December 2022, the Code has continued in force as a regulation under section 88 of the Retail Leases Act 2022, and it will remain the governing instrument until the rest of that Act commences.

What Is the Difference Between a Retail and Non-Retail Lease in Tasmania?

Under the Code, a retail lease covers premises used for businesses listed in Appendix C, which includes shops, restaurants, hairdressers and similar consumer-facing businesses, as well as premises used for any business in a qualifying shopping centre.

A non-retail lease covers premises used for purposes such as warehousing, distribution, manufacturing or professional offices.

Parking facilities, storage units and office buildings that are not part of a retail shopping centre are generally classified as non-retail.

A licence to occupy part of a shopping centre’s common area for more than six months may also be treated as a retail lease under the Code.

The difference between a retail and non-retail lease matters because retail tenants receive the benefit of the Code’s protections, while non-retail tenants do not.

Non-retail tenants must rely primarily on the lease terms they negotiate with their landlord, along with the protections available under the Conveyancing and Law of Property Act 1884, the Landlord and Tenant Act 1935 and the Australian Consumer Law, to protect their interests.

What Tenant Protections Does Tasmania’s Retail Leasing Code Provide?

The Code of Practice for Retail Tenancies gives retail tenants in Tasmania a set of minimum protections that cannot be contracted out of, covering lease duration, pre-lease disclosure, and prohibited charges.

These protections apply automatically to every retail lease covered by the Code.

The aim is to reduce the imbalance in bargaining power between landlords and small business tenants by setting clear rules that both parties must follow.

What Is the Minimum Lease Term for Retail Tenancies in Tasmania?

The minimum lease term for a retail tenancy in Tasmania is five years, as set out in clause 10(3) of the Code.

This five-year minimum is designed to give retail tenants enough security to invest in fit-outs, build a customer base and recover their setup costs.

A shorter term is permitted, but only if the tenant receives independent legal advice and their solicitor provides a certificate confirming they have explained the effect of the reduced term to the tenant.

Without that solicitor’s certificate, the five-year minimum applies by default.

The lease must also include a prescribed warning, printed in bold and at least 12-point type, above the tenant’s signature, advising the tenant to seek independent advice before signing.

What Disclosure Must a Landlord Provide Before Signing a Lease?

A landlord must provide the tenant with a disclosure statement at least seven days before the tenant signs a written agreement to lease, signs the lease itself, takes possession of the premises, or begins paying rent, whichever comes first.

The disclosure statement must contain the information set out in Appendix B of the Code, including details about the rent, outgoings, lease term and any other material terms.

Both the landlord and the tenant must sign the disclosure statement.

The landlord must also provide a copy of the proposed lease and a copy of the Code itself as early as practicable during negotiations.

The landlord must notify the tenant in writing of any material changes to the information disclosed before the lease is signed or the tenant takes possession.

If the landlord fails to notify the tenant of material changes, or if the notification contains false or misleading information, clause 7(3) of the Code allows the tenant to terminate the lease within three months of commencement.

The landlord may contest the termination within seven days on specified grounds, and any losses the tenant recovers are subject to mitigation.

Are Key Money and Ratchet Clauses Allowed in Tasmania?

Key money is prohibited under clause 9 of the Code.

A landlord cannot require a tenant to pay key money as a condition of granting, renewing, extending or assigning a retail lease.

Under the Code, key money includes any money or benefit connected with the granting, renewing, extending or assigning of a lease, subject to the Code’s provisions on what constitutes key money.

If a tenant does pay key money, they can recover the amount from the landlord.

Ratchet clauses, which prevent rent from decreasing at a review, are also invalid under the Code.

Clause 12(8) provides that any lease term prohibiting a decrease in rent at review is of no effect.

This means that if the agreed review method produces a lower figure, the lease cannot prevent rent from decreasing.

However, the outcome at each review depends on the method specified in the lease, and a fixed percentage increase will not convert to a market-based reduction simply because market rents have fallen.

How Are Rent Reviews Handled Under Tasmanian Lease Law?

Rent reviews in Tasmanian retail leases must follow one of the methods prescribed by clause 12 of the Code, and no review can occur during the first 12 months of the lease or more than once in any 12 months after that.

The lease must clearly state which review method applies and specify every adjustment date.

If the lease does not state the adjustment dates, no rent adjustment can be made.

What Rent Review Methods Are Permitted Under the Code?

Clause 12(2) of the Code allows five rent review methods: adjustment by a consumer price index published by the Australian Bureau of Statistics (including the CPI All Groups, Hobart), a fixed agreed percentage, market value rent, a fixed agreed dollar amount, or an agreed formula.

The lease must nominate a single method for each review.

A clause that combines two or more methods, or gives the landlord discretion to choose between methods at the time of review, is invalid under clause 12(4).

For market rent reviews, the landlord must give the tenant at least three months’ notice of the proposed new rent before the adjustment date.

The tenant may request the landlord’s estimate of market rent between four and six months before the adjustment date.

If the tenant does not respond to the landlord’s proposed market rent within 21 days, the proposed figure applies.

Where the parties cannot agree on market rent, either party may refer the matter to an independent valuation under clause 21 of the Code.

The valuation is conducted by a single jointly appointed valuer, or by two valuers with a third appointed to resolve any disagreement.

Each party pays the costs of their own appointed valuer, and if a third valuer is appointed, the costs of that valuer are shared equally between the parties.

How Often Can Rent Be Reviewed in Tasmania?

Rent cannot be adjusted during the first 12 months of a retail lease, and after that, adjustments are limited to once every 12 months.

This restriction prevents landlords from imposing frequent increases that could undermine a tenant’s ability to plan and budget.

The restrictions on review frequency are subject to clause 16 of the Code, which provides for agreed special rent arrangements where the landlord has funded fit-outs or equipment for the tenant.

For market value reviews, the landlord cannot claim retrospective rent adjustments under clause 13(8), meaning any increase takes effect only from the stated adjustment date, not from an earlier period.

For leases that include turnover rent, clause 15 sets out how turnover figures are calculated and which items are excluded from the calculation, such as refunds and discounts.

If a turnover audit shows the tenant’s figures were at least 95% accurate, the landlord bears the cost of the audit.

What Are the Rules on Outgoings and Security Deposits in Tasmania?

The Code sets clear limits on what outgoings a landlord can recover from a retail tenant and caps the amount of security a landlord can demand.

These rules apply to all retail leases covered by the Code and cannot be overridden by the terms of the lease.

What Outgoings Can a Landlord Charge a Tenant in Tasmania?

Under clause 18, the lease must specify which outgoings are recoverable, how they are calculated, and when they are payable.

A tenant generally cannot be charged for outgoings that are not specified in the lease, although clause 18(2)(f) provides an exception for outgoings that were not reasonably foreseeable when the lease was entered into.

Certain categories of cost are excluded and cannot be passed on to the tenant.

These include capital expenditure, depreciation charges, the landlord’s borrowing interest, loss-of-income insurance premiums, and the landlord’s own promotional costs.

The landlord’s general sinking fund contributions are also excluded, though the lease may provide for specified funding toward major repairs and maintenance through a separate account under clause 18(5)(a).

Properly structured shopping centre advertising and promotion charges may be recoverable, subject to the safeguards in clause 34 of the Code.

The tenant’s share of recoverable outgoings must be calculated based on either the lettable area of their premises or the assessed annual value, as specified in the lease.

Where a tenant makes a written request under clause 18(6), the landlord must provide a detailed estimate of recoverable outgoings at least one month before the relevant accounting year, along with information about expenditure for a specified period.

The tenant is entitled to request an independent audit of the landlord’s outgoings once per year, and the landlord must appoint an auditor who reports within three months of the accounting year end.

If the landlord’s statement is at least 95% accurate, the tenant bears the cost of the audit.

Where the lease provides for estimated outgoings payments and reconciliation under clause 18(5)(b), any difference between the estimated amount paid and the actual share should be adjusted in accordance with the lease terms.

How Much Can a Security Deposit Be Under Tasmanian Law?

A security deposit for a retail lease in Tasmania cannot exceed three months’ rent under clause 30 of the Code.

The landlord must hold the deposit in a trust account that earns interest, and they must account to the tenant for that interest.

The landlord is also required to provide the tenant with written terms setting out the conditions under which the deposit will be refunded.

Retail and commercial bonds in Tasmania do not need to be lodged with the Rental Deposit Authority, which only applies to residential tenancies.

The landlord may accept a bank guarantee instead of a cash deposit, and must not unreasonably refuse a tenant’s request to provide one.

How Do Assignment and Lease Renewals Work in Tasmania?

The Code sets out specific rules for how retail tenants can transfer their lease to another party, and what must happen when a lease is approaching its expiry date.

These provisions give tenants a degree of certainty and prevent landlords from unreasonably blocking a legitimate business transfer or leaving a tenant without adequate notice about the future of their tenancy.

Can a Tenant Assign or Sublease a Retail Lease in Tasmania?

A tenant may request consent to assign their retail lease under clause 28 of the Code, and the landlord must not unreasonably withhold that consent.

The tenant must request in writing, and the landlord has 14 days to ask for any additional information about the proposed assignee.

Once the landlord has all the information they need, they must make a decision within 21 days.

If the landlord does not respond within those 21 days, consent is treated as given.

The landlord may refuse consent on limited grounds, including a proposed change of use that is not consistent with the lease, the assignee lacking adequate financial resources or business skills, or the assignee refusing to sign the lease agreement.

The landlord may recover reasonable assessment costs from the outgoing tenant, and the tenant is entitled to request proof of those costs.

Subleases entered into after the Code’s commencement are also brought within the scope of the Code’s protections.

What Happens When a Retail Lease Expires in Tasmania?

If a retail lease does not contain a renewal option, the landlord must give the tenant at least three months’ written notice before the lease expires, setting out whether they intend to offer a renewal, the proposed terms, or whether they will not be renewing.

The tenant then has 30 days to respond.

If the tenant does not respond, the lease is not renewed.

However, if the landlord fails to provide the required notice, the tenant may elect in writing within two weeks after the landlord’s notice deadline to extend the lease term for the period of notice that was not given.

This holdover protection prevents tenants from being left without premises at short notice because a landlord neglected to communicate their intentions.

Where a lease includes a renewal option, the lease must specify the renewal period.

For market rent options, the tenant may request an estimate of the proposed rent between four and six months before the deadline for exercising the option, and the landlord must respond at least three months before that deadline.

The tenant then has 30 days to exercise the option, negotiate, or request a valuation.

A landlord may refuse a new lease if the option was not exercised on time or if the tenant is in default of the existing lease.

At renewal, the rent defaults to market value rent as determined under clause 21 of the Code, unless the parties agree otherwise.

How Are Commercial Lease Disputes Resolved in Tasmania?

Tasmania currently has a limited dispute resolution framework for retail lease disputes, with no dedicated tribunal or binding arbitration service for tenants and landlords.

Under clause 39 of the Code, the parties must first attempt to resolve the dispute through direct negotiation.

If negotiation fails, either party may ask Consumer Affairs Tasmania to investigate the matter and help negotiate a resolution.

Consumer Affairs Tasmania (which took over the consumer affairs functions of Consumer, Building and Occupational Services from 1 October 2026) can facilitate discussions and attempt to bring the parties to an agreement, but it cannot make binding decisions or order a party to take a specific action.

If the dispute remains unresolved, the Code provides for referral to the Retail Tenancies Code of Practice Monitoring Committee, which may attempt conciliation and make recommendations.

However, the Committee’s recommendations are not enforceable.

If all other avenues are exhausted, the remaining option is to take the matter to court, either the Magistrates Court for smaller claims or the Supreme Court of Tasmania for more significant disputes.

Court proceedings can be costly and time-consuming.

In September 2026, ABC News reported on a Tasmanian cafe owner who estimated she could face around $50,000 in legal costs to resolve a retail lease dispute, highlighting how unsuccessful negotiations can leave parties facing expensive litigation without an affordable alternative.

The Retail Leases Act 2022, once commenced, is expected to introduce a formal mediation pathway and give the Director of Consumer Affairs and Fair Trading specific administrative and regulatory functions in relation to retail tenancy matters, addressing this gap in the current system.

Will the Retail Leases Act 2022 Change Commercial Leasing in Tasmania?

Yes, the Retail Leases Act 2022 will significantly overhaul Tasmania’s retail leasing framework once it commences, replacing the 1998 Code of Practice with primary legislation for the first time.

The Act received Royal Assent on 14 December 2022, but as of October 2026, only two of its 88 sections are in force: section 2 (commencement) and section 88 (which preserves the existing Code as a transitional measure).

The Tasmanian Government has attributed the delay to the complexity of the legislation and the need for supporting regulations.

The Department of Justice has indicated that the Act requires amendments before it can be proclaimed, and that these will need to be brought back to parliament.

Until the rest of the Act commences, the 1998 Code remains the governing instrument for retail leases in Tasmania.

The Act’s provisions as currently enacted may be subject to further amendment before substantive commencement, but based on the enacted text, the key changes include the following.

The five-year minimum lease term will be removed, with the Act applying to retail leases of six months or more as an application threshold rather than a mandatory minimum term.

A formal mediation process will be established for disputes that cannot be resolved through direct negotiation.

The Director of Consumer Affairs and Fair Trading will be given specific administrative and regulatory functions in relation to retail tenancy matters.

Landlords will be required to give four to six months’ notice of their renewal intentions before a lease expires, where the tenant does not have an option to renew.

Tenants will have the right to terminate within six months if no disclosure statement was provided, if it was materially incomplete, or if it contained materially false or misleading information, subject to a landlord objection process under section 26.

Stricter rules on outgoings will prevent landlords from recovering undisclosed costs.

Under section 8, existing leases will continue to be governed by the Code, subject to regulations that may apply certain provisions of the Act during the transition.

The following table compares the key differences between the current Code and the Retail Leases Act 2022 as currently enacted.

Do You Need to Register a Commercial Lease in Tasmania?

A commercial lease in Tasmania that runs for more than three years should generally be registered with the Land Titles Office under the Land Titles Act 1980.

Leases of three years or less are not registrable under section 64(2) of the Land Titles Act 1980.

Section 40 of the Act does provide some protection for certain short-term leases where the tenant is in possession, but this protection has limitations and may not cover all situations.

Registration protects the tenant’s interest in the property by recording the lease on the title.

This matters because an unregistered lease may not bind a new owner if the property is sold, meaning the tenant could lose their right to occupy the premises.

An unregistered lease may also be vulnerable if the landlord’s mortgagee exercises its power of sale or if the landlord becomes bankrupt.

However, registration alone does not guarantee protection in every situation.

Under section 64(3) of the Land Titles Act 1980, the landlord’s mortgagee or other encumbrancee must have given prior written consent for the lease to bind them.

The cost of registration includes the Land Titles Office lodgement fees.

Under section 53(d) of the Duties Act 2001, leases in Tasmania are generally exempt from stamp duty, except where a premium exceeding $3,000 is paid in connection with the grant, transfer or surrender of the lease.

While both parties can agree on who bears these costs, the lease should specify this clearly.

For non-retail leases, there is no statutory requirement to register within a particular timeframe, but doing so promptly is generally advisable.

For retail leases, the Code does not address registration directly, so the general rules under the Land Titles Act 1980 apply.

Need Help With a Commercial Lease in Tasmania?

Tasmania’s commercial leasing framework can be difficult to work through, particularly with the 1998 Code of Practice still governing retail tenancies while the Retail Leases Act 2022 remains uncommenced.

Whether you are entering a new lease, reviewing an existing one, dealing with a rent review or outgoings dispute, or considering assigning your lease to a new tenant, getting the right legal advice early can help you avoid costly problems later.

As commercial lease lawyers working with tenants and landlords across Australia, my law firm can help you understand your rights and obligations under Tasmanian lease law.

Contact us today on 1300-529-888 to discuss your commercial lease needs.

Frequently Asked Questions

Does Tasmania have a retail leases act?

Tasmania passed the Retail Leases Act 2022, which received Royal Assent on 14 December 2022. However, as of October 2026, almost all of its provisions remain uncommenced. Retail leases in Tasmania are currently governed by the Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998, which continues in force under section 88 of the 2022 Act until the remaining provisions are proclaimed.

What is the minimum lease term for a retail tenancy in Tasmania?

The minimum lease term for a retail tenancy in Tasmania is five years under clause 10(3) of the Code of Practice for Retail Tenancies. A shorter term can be agreed to, but only if the tenant receives independent legal advice and their solicitor provides a written certificate confirming they explained the reduced term. Without this certificate, the five-year minimum applies automatically.

Can a landlord charge key money for a retail lease in Tasmania?

No. Key money is prohibited under clause 9 of the Code of Practice for Retail Tenancies. A landlord cannot require key money as a condition of granting, renewing, extending or assigning a retail lease. The Code defines key money broadly as any money or benefit connected with the lease beyond properly payable charges. Tenants who pay it can recover it.

How are commercial lease disputes resolved in Tasmania?

Retail lease disputes under the Code follow a stepped process: direct negotiation, then Consumer Affairs Tasmania facilitation, then the courts. Non-retail commercial lease disputes rely on contractual remedies and the courts directly. Consumer Affairs Tasmania can facilitate discussions but cannot make binding decisions. The Retail Leases Act 2022 will add formal mediation for retail disputes once commenced.

What happens if a landlord does not provide a disclosure statement in Tasmania?

Under the Code of Practice, a landlord must give the tenant a disclosure statement at least seven days before signing a written agreement to lease, signing the lease, taking possession, or paying rent. If the landlord fails to notify the tenant of material changes, or provides false or misleading notification, the tenant may terminate within three months under clause 7(3).