Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA): Complete Guide

The Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) sets minimum standards for retail shop leases in Western Australia.

It applies to shops with a lettable area of 1,000 square metres or less, gives tenants a right to a five-year term, requires landlords to hand over a disclosure statement at least seven days before signing, controls rent reviews and outgoings, and sends disputes to the State Administrative Tribunal.

The detail is where the money sits, because several clauses that appear in ordinary retail leases are void under the Act whether or not you signed them.

Which Leases Does the Commercial Tenancy Retail Shops Act in WA Cover?

The Act covers a lease of a “retail shop” where the lettable area is 1,000 square metres or less and the tenant is not a listed corporation or a subsidiary of one.

Western Australia uses two separate tests, and the difference between a commercial lease and a retail lease comes down to where the premises sit.

Inside a retail shopping centre, premises used wholly or predominantly to carry on a business of any kind are caught.

Outside a centre, only premises used wholly or predominantly for the sale of goods by retail, or for one of five “specified businesses”, are caught.

That split catches out a lot of people, because an office suite or a service business inside a shopping centre can be covered while the identical business in a standalone building is not.

The practical takeaway is that location changes the answer more than the type of business does.

Before you accept that a lease sits outside the Act, check the shopping centre test first, because it is much wider than most landlords assume.

What Counts as a Retail Shopping Centre in Western Australia?

A retail shopping centre is a cluster of premises where five or more are used to carry on a retail business, and where all the premises share a common head lessor, sit in one community titles scheme, or are lots on a single strata plan.

Both limbs have to be satisfied, so the count alone is not enough.

A strip of eight tenancies with five retailers and three offices qualifies if that common ownership or title condition is met, and every tenant in the cluster is then assessed under the wider “any business” test.

This means a bookkeeper or a physiotherapist in a neighbourhood strip can hold a lease governed by the Act while an identical practice down the road is left with a plain commercial lease and no protection under this Act.

Consumer Protection WA confirms the five premises threshold and publishes the current list of specified businesses.

Which Leases Fall Outside the Act?

A lease falls outside the Act if the lettable area of the shop exceeds 1,000 square metres, if the tenant is a listed corporation or a subsidiary of one, or if the regulations exclude the premises.

The regulations exclude premises used to sell petrol or diesel for vehicles on public roads, subject to a limited exception for certain franchise arrangements, and premises leased only for a vending machine or an ATM.

The size test is based on lettable area rather than the gross area of the building, so a shop sitting close to the threshold is worth measuring carefully before either side assumes the Act applies.

The listed corporation exclusion commonly affects leases held directly by listed companies and their subsidiaries, though a business is not excluded merely because it trades nationally or uses a national brand.

Where a lease is outside the Act, the parties fall back on the ordinary rules that govern a commercial lease and general contract law, which is a far less forgiving position for a tenant.

The five specified businesses are drycleaning, hairdressing, beauty therapy and treatments, shoe repair including key cutting and engraving, and the sale or rental of videos, DVDs and electronic games.

The test turns on how the premises are actually used rather than on the permitted use clause alone, though that clause is strong evidence of it.

What Must a Landlord Disclose Before You Sign a Retail Shop Lease?

A landlord must give the tenant a disclosure statement in the prescribed form at least seven days before the lease is entered into.

The statement has to be completed and signed by or for both parties, and it must tell the tenant to get independent legal advice.

Its purpose is to put the real terms of the commercial lease agreement in writing before anyone is committed, covering matters such as the term, the rent, outgoings, and the condition of the premises.

A disclosure statement is not required when a lease is renewed under an existing option, or on an assignment.

What Happens if the Landlord Does Not Give a Disclosure Statement?

If the statement was not given in time, was incomplete, or contained false or misleading information, the tenant can give the landlord written notice of termination within six months after the lease was entered into.

The lease then ends 14 days after that notice.

The tenant can also apply to the State Administrative Tribunal for compensation for money actually lost because of the failure, and the Act allows the tenant to pursue either remedy or both.

There is one defence available to the landlord, and it is narrow.

Where a statement was given but was incomplete or contained false or misleading information, termination is unavailable if the landlord acted honestly and reasonably, ought reasonably to be excused, and the tenant is in substantially as good a position as it would have been had the statement been complete and accurate.

That defence does not help a landlord who gave no disclosure statement at all, and it does not block a claim for compensation.

Why Does the Tenant Guide Have a Separate Deadline?

The 60 day deadline applies only to the tenant’s right to end the lease by its own written notice, not to every tenant guide remedy.

The Act requires a prescribed-form tenant guide to be included in the lease itself, and if it is missing the tenant can give written notice of termination within 60 days after the lease was entered into, claim compensation for loss, or do both.

After that 60 day period has passed, the tenant can still claim compensation and can apply to the State Administrative Tribunal for an order terminating the lease.

The current version is the Tenant Guide (Form 4) published by Consumer Protection.

Because the two documents carry different deadlines, a tenant who discovers a problem at month four keeps the direct disclosure remedy but has to go to the Tribunal for termination on the tenant guide.

Checking both within the first eight weeks of a new lease is the simplest way to keep every option open.

Are You Entitled to a Five-Year Retail Shop Lease in WA?

Yes, in most cases the Act tops your tenancy up to five years.

Where a retail shop lease runs for more than six months but the term plus any option adds up to less than five years, the lease is taken to give the tenant an option to renew, ending on a date the tenant nominates no later than five years after the current term started.

The option is exercised by written notice in the prescribed form given at least 30 days before the current term expires.

It cannot be exercised while the tenant is in default and has been given written notice of that default.

Two exclusions apply.

The first is where the tenant has already occupied the premises long enough that past occupation, the current term and the option together reach five years or more.

The second is where the landlord holds the premises under a head lease and the renewal would be inconsistent with it.

When Can a Landlord End a Retail Shop Lease Early?

Apart from the exceptions the Act itself lists, a landlord needs State Administrative Tribunal approval before it can rely on a clause ending the lease inside the protected five-year period, and approval is given only where special circumstances exist.

The listed exceptions cover termination for tenant default, an unresolved inconsistency with a head lease, a prescribed insolvency provision, and cases where the Tribunal has granted an application made by the tenant.

In 480 Hay Street Pty Ltd v Irwin St Lower Pty Ltd [2020] WASC 59, Curthoys J described special circumstances as circumstances that are out of the ordinary, without having to be extraordinary or exceptional.

Martin J applied that test in Hay & Colin Pty Ltd v West End Hospitality Pty Ltd [2021] WASC 458, approving a redevelopment clause where the building was ageing, every lease in the building carried an equivalent approved clause, the tenant was entitled to substantial compensation, and 12 months’ notice was required.

The Tribunal has since clarified what that test requires in practice.

In Synicast Pty Ltd and Showroom X Pty Ltd [2023] WASAT 47 it held that the special circumstances must already exist, or there must be an objective intention that they will arise, so a landlord cannot obtain blanket approval for a clause aimed at a demolition, a resumption or a fire that is merely possible.

That reasoning was followed in three further 2023 decisions, which means landlords now need a real and identifiable redevelopment plan rather than a speculative one.

How Does the Act Control Rent Reviews in Retail Leases?

A rent review provision is void unless the lease specifies a single basis for the review on each occasion it is carried out.

A clause that lets the landlord take the greater of CPI or a fixed percentage does not meet that requirement, because it names two bases rather than one.

Where the review is to market rent, the Act defines that as the rent obtainable in a free and open market as if the shop were vacant and to let on similar terms, ignoring goodwill, tenant improvements and the tenant’s own stock and fixtures.

Ratchet clauses are void as well, so a term that prevents the market rent from falling, or caps how far it can move, has no effect.

A clause stopping the tenant from voluntarily telling anyone what rent it pays is also void, which is what makes market comparison between tenants in the same centre possible.

If the parties cannot agree the reviewed rent, the lease is treated as providing for a valuer licensed under the Land Valuers Licensing Act 1978 to determine it.

That valuer is either agreed between the parties, nominated by the Small Business Commissioner, or made up of one valuer appointed by each side.

The landlord then has 14 days to answer a written request from the valuer for relevant information, including current rents, rent-free periods, lease variations and outgoings.

What Outgoings Can a Landlord Recover From a Retail Tenant?

A landlord can only recover the outgoings a tenant pays that the lease specifically identifies, with a clear method for working out the amount and the tenant’s share, which is what separates a net rent from a gross rent arrangement.

The tenant’s proportion cannot exceed its relevant proportion without Tribunal approval, which for premises in a group is the lettable area of the shop divided by the total lettable area the expense relates to.

Two categories are simply not recoverable at all.

Management fees payable to or for the benefit of the landlord cannot be recovered, and in a retail shopping centre any clause amortising the construction cost of the centre across tenants is void.

The landlord must also give annual estimates of expenditure and, within three months after the end of each accounting period, an operating expenses statement prepared under the applicable Australian Accounting Standards and accompanied by a registered company auditor’s report.

Half the audit cost falls on the landlord.

An audit is not needed where the statement covers only land tax, water, sewerage and drainage charges, local government rates and charges or insurance premiums, and comes with proof of payment.

The consequence of getting either requirement wrong is severe for a landlord.

The annual estimate and the end of period statement are separate obligations with separate consequences, and missing the statement suspends the tenant’s obligation to pay operating expenses from the date of non-compliance until the day the landlord complies.

A landlord who has already spent the money cannot repair the position by producing a document after the fact, because a record of expenditure that has been incurred and is already known is not an estimate of anything.

What Other Retail Lease Clauses Does the Act Make Void?

The Act strikes out a list of clauses that commonly appear in draft retail leases, regardless of what the parties signed.

Key money and payments for goodwill are void, apart from a payment for goodwill in a business the landlord itself ran immediately before the lease started.

Any clause requiring the tenant to open at specified hours or times is void, and a tenant who believes a lease was not renewed because it did not keep those hours can seek compensation from the Tribunal.

A clause preventing the tenant from forming or joining a tenants’ association is void.

The landlord’s legal costs of preparing the lease cannot be passed on to the tenant.

Relocation clauses and clauses requiring a refit are void in certain circumstances, which sits alongside the separate make good clause obligations at the end of a lease, and a term that purports to contract out of the Act altogether has no effect.

Leases in a retail shopping centre are also taken to include a compensation right.

If the landlord substantially inhibits access, alters or blocks customer flow, causes or fails to fix trading disruption, fails to repair plant that causes lost profits, or fails to clean, maintain or repaint the building and common areas, compensation is payable.

That right only bites after the tenant gives written notice requiring the matter to be fixed and the landlord fails to act within a reasonable time, so putting complaints in writing early is what preserves the claim.

How Do You Resolve a Retail Shop Lease Dispute in Western Australia?

Retail shop lease disputes in WA go to the Small Business Commissioner first and the State Administrative Tribunal second.

Either a landlord or a tenant can ask the Commissioner, who heads the Small Business Development Corporation, to help resolve the matter through case management or mediation.

Case management is free and mediation costs $125 per party per session, which is a fraction of what a contested hearing costs.

In its 2023-24 annual report the Corporation finalised 535 dispute cases, fielded 1,130 dispute-related enquiries, and put the estimated value of the disputes it handled at $26.8 million.

It issued 30 Tribunal certificates under the Act in the same year, a figure that covers only the retail tenancy pathway rather than the whole caseload.

When Do You Need a Certificate From the Small Business Commissioner?

Most applications to the Tribunal must be accompanied by a certificate from the Commissioner confirming the matter was not resolved.

The Tribunal will not accept an application where a certificate is required but not attached, so lodging without one simply loses time.

A small number of administrative applications can go straight to the Tribunal, and the parties can also agree that a certificate is unnecessary.

An application referring a question about a lease can only proceed without a certificate if it comes with an application for an urgent interim order.

Where a landlord is about to lock the doors or a tenant is about to lose a fit-out, that urgent pathway is the one that matters.

What Orders Can the State Administrative Tribunal Make?

Under its general powers the Tribunal can order a party to pay money, require or restrain particular conduct, terminate a lease, or dismiss the matter.

It can also determine a reviewed rent and decide over what period an increase or reduction is payable, approve an early termination clause, and approve a different proportion of operating expenses.

On an unconscionable conduct or misleading conduct application the Act spells out a further set of remedies, including payment by way of debt, damages or restitution, a refund, a declaration that an amount is not owing, and ancillary orders.

Many commercial tenancy matters are dealt with entirely on the documents and are lodged electronically.

Time limits vary by claim type, and an application about unconscionable conduct must be lodged within six years after the conduct occurred.

What Counts as Unconscionable Conduct Under the Retail Shops Act?

Both landlords and tenants are prohibited from engaging in conduct that is unconscionable in all the circumstances in connection with a retail shop lease.

The Tribunal weighs a long list of factors, including the relative bargaining strength of the parties, whether the tenant was pushed into conditions not reasonably necessary to protect the landlord, whether the tenant could understand the documents, undue influence or unfair tactics, consistency with how the landlord treats similar tenants, good faith, and whether refurbishment or fit-out demands were unreasonable.

A landlord’s failure to disclose intended conduct that might affect the tenant is on the list too.

The Act also sets out what is not unconscionable on its own.

Starting legal proceedings, declining to renew a lease or enter a new one, and refusing to agree to an independent market rent valuation are each expressly excluded.

A separate prohibition covers misleading or deceptive conduct by either party in connection with the lease, with its own Tribunal remedies.

That matters most in the pre-lease period, when promises about anchor tenants, centre upgrades or foot traffic are often made verbally and never written down.

Is the Commercial Tenancy Retail Shops Act in WA About to Change?

The statutory review is finished, but no amending legislation has been passed, and the version in force still operates from 30 June 2021.

The Act requires a statutory review every five years, and the final report of the most recent review was tabled in Parliament on 15 October 2024.

It contains a number of recommendations for reform, covering lease coverage, the minimum five-year term, disclosure requirements, lease costs, first right of refusal, early termination, trading hours, dispute resolution and unconscionable conduct.

Consumer Protection has said the Government was set to begin drafting amendments in 2025.

Until amending legislation passes, the rules described above are the ones that apply.

The sensible response for anyone signing a long retail lease now is to negotiate on the current law while keeping an eye on the reform pipeline, because a lease signed today may well run into the amended regime.

Tenants comparing their position across borders can look at the equivalent Retail Leases Act in NSW, Victoria and Queensland, each of which sets different thresholds.

Western Australia has a growing base of businesses that will feel any change, with the Australian Bureau of Statistics recording a 4.6% rise in WA business numbers in 2025-26, the largest percentage increase of any state.

Get Help With Your WA Retail Shop Lease

The Commercial Tenancy Retail Shops Act in WA gives retail tenants real protection on term, disclosure, rent reviews and outgoings, but only if the lease is checked against the Act before it is signed.

As commercial lease lawyers in Perth, my law firm can review your retail shop lease, tell you whether the Act applies, and deal with a dispute at the Small Business Commissioner or the State Administrative Tribunal, all at a fixed fee agreed before the work starts.

Contact my law firm today by calling 1300-529-888.

Frequently Asked Questions

Does the Commercial Tenancy Retail Shops Act apply to offices in WA?

It can. An office inside a retail shopping centre is covered, because premises in a centre are caught if they are used wholly or predominantly to carry on a business of any kind. A standalone office outside a centre is not covered, since the outside-centre test only reaches the retail sale of goods and five listed specified businesses.

Can a tenant still act on a missing tenant guide after 60 days?

Yes. The 60 day limit applies only to ending the lease by the tenant’s own written notice. After that period the tenant can still apply to the State Administrative Tribunal for an order terminating the lease, and can claim compensation for pecuniary loss caused by the landlord’s failure to include the guide in the lease.

Can a WA landlord charge the tenant for preparing the lease?

No. The Act says a landlord’s legal costs of preparing the lease cannot be claimed from the tenant, and a clause attempting to pass them on has no effect. Landlords also cannot recover management fees payable for their own benefit, and in a retail shopping centre they cannot amortise the centre’s construction costs across tenants.

What is the deadline to terminate a lease for a missing disclosure statement?

Six months from the day the lease was entered into. The tenant gives written notice and the lease ends 14 days later, and the tenant can also seek compensation from the State Administrative Tribunal, because the Act allows either remedy or both. A missing tenant guide carries a shorter 60 day notice deadline.

Do I need to go to mediation before applying to the Tribunal in WA?

In most cases you must first obtain a certificate from the Small Business Commissioner confirming the matter was not resolved, and the Tribunal will reject an application lodged without one. A few administrative matters proceed directly, the parties can agree a certificate is unnecessary, and an urgent interim order application can be made without one.