Leases (Commercial and Retail) Act 2001 (ACT): Overview

The Leases (Commercial and Retail) Act 2001 is the main source of ACT commercial lease law.

It covers retail premises, small commercial premises of 300 square metres or less, and a listed set of other uses.

It gives tenants a right to a five year total term, caps bonds at three months’ rent, limits rent reviews to once a year, and requires a disclosure statement 14 days before signing.

Most of those protections apply whether or not the lease mentions them, and the one landlords most often want removed turns on whether the tenant took independent legal advice before signing.

Miss that step and a one year lease can be extended to five years at the tenant’s election.

What Does the Leases (Commercial and Retail) Act 2001 Cover?

The Leases (Commercial and Retail) Act 2001 applies to leases of retail premises, premises in the retail area of a shopping centre, small commercial premises, and a specific list of other premises set out in section 12.

Small commercial premises are premises with a lettable area of no more than 300 square metres, which means many Canberra offices, studios and small warehouses are covered even though nothing is sold from them.

Large excluded premises, being premises with a lettable area larger than 1,000 square metres that are leased to a listed public company or a subsidiary of one, sit outside the Act.

That combination makes the ACT unusually broad at the small end, because whether the deal is a commercial lease or a retail lease matters less here than the size of the premises.

The table below compares the main categories of premises and whether the Act applies to each.

The key takeaway from the table is that the label on the document does not decide coverage.

Size and tenant identity matter, and so do the permitted use, whether the premises sit in the retail area of a shopping centre, how long the lease runs, and the categories prescribed or excluded by the Act and the Regulation.

A lease headed “commercial lease” can still be caught by the Act if the premises are 300 square metres or less.

A landlord who assumes otherwise may find that clauses in the lease are void and that the tenant has statutory rights the landlord never priced in.

Which Uses Are Covered Even When They Are Not Retail?

Section 12 also brings in a list of specific uses regardless of whether goods are sold from the premises.

These include premises leased to an association incorporated under the Associations Incorporation Act 1991, or to a body eligible to be incorporated under it, and premises leased to an unincorporated charitable entity.

The list also covers premises used to provide a combination of business accommodation and secretarial services, which captures serviced offices.

Premises used as an education and care service or childcare centre, a sports centre, an art gallery or a gardening supply centre are covered as well.

The Leases (Commercial and Retail) Regulation 2002 adds service stations to that list, so the Act and the Regulation both need checking rather than the Act on its own.

Residential premises leased to an association or charity are excluded from those particular categories.

When Does the Act Not Apply?

The Act does not apply to a lease for less than six months unless it is a continuous occupation lease.

A continuous occupation lease arises where the tenant was already occupying the premises with the owner’s consent and has done so continuously for at least six months.

That rule stops landlords from rolling a tenant through a series of short documents to keep the Act out of the picture.

Premises and leases prescribed by regulation are also excluded, and the current Regulation names a number of specific tenancies, which is another reason to check both instruments before advising either party.

What Protections Does ACT Commercial Lease Law Give Tenants?

The Act gives covered tenants a disclosure statement before signing, a right to a five year total term, a cap on bonds, limits on how often rent can move, and controls on what outgoings a landlord can recover.

These sit on top of the lease rather than inside it, so a clause that contradicts them is generally void.

The sections below set out how each protection works in practice.

When Must a Landlord Give a Disclosure Statement?

A lessor must give the tenant a disclosure statement for the proposed lease at least 14 days before the lease is entered into.

The statement uses the approved disclosure statement form and itemises the outgoings the tenant will be asked to pay for the first accounting period.

The 14 day period can be waived or varied, but only where the tenant gives the lessor a certificate signed by a lawyer stating that the tenant knows about the time limits and has chosen to waive or vary them.

Disclosure matters because it fixes what the landlord said before the deal was done.

There is no general rule that the disclosure statement overrides the lease, and a tenant is only liable for an outgoing where it was disclosed, the lease supports it and the Act makes it recoverable.

Where a statement is false, misleading or materially incomplete, the remedy depends on the section relied on, with sections 36 and 37 covering compensation for misrepresentation and sections 117 to 121 covering a tenant’s limited right to terminate.

Tenants should treat the statement as a checklist rather than a formality, and compare every outgoing figure in it against the lease before signing.

How Does the Five Year Minimum Term Work?

Section 104 gives a tenant the right to extend a lease so that the total term reaches five years, where the total term agreed is less than five years.

The total term includes the initial term plus any further terms or options granted at the same time as the lease.

The tenant exercises the right by written notice given no later than 90 days before the end of the term, and the extension takes effect once the tenant asks for the extended lease to be registered or lodges a caveat.

The lessor must then take all reasonable steps to register the extended lease.

The right does not apply where the tenant received independent legal advice about the lease before entering into it, from a lawyer who was neither acting for the lessor nor nominated by the lessor.

A written certificate from that lawyer is conclusive evidence that the advice was given, which is why these documents are known in Canberra as section 104 certificates.

Continuous occupation leases are also excluded, along with certain leases granted on a change of use and leases granted under an earlier option to renew, provided the statutory conditions are met, including no break in the tenant’s entitlement to possession.

The right does not arise either where extending the term would be inconsistent with the head lease the lessor holds, or would otherwise be unlawful.

In practice, a landlord who wants a genuine two or three year term will usually make the certificate a condition of the deal.

How Much Can a Landlord Ask For as a Bond?

Section 39 stops a lessor requiring or accepting a bond of more than the rent payable under the lease for any three month period nominated by the lessor.

Rent paid in advance beyond three months is treated as part of the bond rather than as separate security.

A lessor also cannot unreasonably refuse a bank guarantee offered instead of cash, which matters for tenants who do not want capital tied up for the life of the lease.

The bond is held in an interest bearing trust account and must be repaid within 30 days after the later of the lease ending and the tenant vacating, less any lawful deductions.

How Often Can Rent Be Reviewed?

Rent can be changed no more than once in each 12 month period after the first anniversary of the lease, and any clause allowing more frequent changes is void under section 47.

That rule carves out predetermined stepped increases, changes attributable to GST, rent abatements, a review on the exercise of an option, turnover rent adjustments and head lease increases passed through a sublease.

Section 46 makes a discretionary rent review clause void, and that covers more than a clause letting one party pick the review method.

It also catches clauses that take the highest of several methods, clauses giving complete discretion over the new rent, and ratchet clauses that stop rent falling where a review would otherwise reduce it.

The lease has to state the review dates or set out a way of working them out.

Where the parties cannot agree on a market rent review, the Magistrates Court can appoint a valuer, and it can do that straight away where mediation would not be productive or the parties agree.

Rent continues at the previous rate while that process runs, and the difference is adjusted once the valuation is determined.

Tenants who think a review has been run outside these rules should raise it promptly rather than paying under protest for months.

Which Outgoings and Costs Can a Landlord Recover?

A tenant is only liable for outgoings that were disclosed in the disclosure statement, described in the lease, and recoverable under the Act.

Recoverable outgoings are limited to the reasonable costs of operating, repairing and maintaining the building or, for a shopping centre, the retail area, together with rates, taxes and other statutory charges, the reasonable cost of promoting a shopping centre, and expenditure on obtaining statistical information.

The lessor must give written estimates before each accounting period and a statement of actual expenditure afterwards, with adjustments made between estimate and actual.

Key money is prohibited under section 38, so a lessor cannot ask for or accept a payment for granting, renewing, extending or consenting to a dealing with a lease.

Anything taken in breach of that section is recoverable by the tenant as a debt.

The Act also stops a lessor passing on the cost of preparing the lease itself, which is a common point of argument during negotiation.

What Rules Apply at the End of an ACT Lease?

The Act sets out how a tenant can find out whether a lease will be renewed, and what a landlord can do when a tenant wants to assign or sublet.

These rules matter most in the final year of a lease, when both parties are making decisions about capital and staffing.

Missing a deadline here is one of the more expensive mistakes in commercial leasing.

How Do You Find Out Whether the Lease Will Be Renewed?

Section 107 lets a tenant ask the lessor in writing whether the lease will be renewed, and the lessor must answer in writing within one month.

For a lease longer than one year, the request can be made when the lease has between six and twelve months left to run.

For any other lease, the request window is between three and six months before the lease ends.

If the lessor answers late, the lease is extended by a period equal to the delay, which makes a missed deadline expensive for a landlord.

Tenants should diarise the opening of that request window, because the right to ask is time limited and a business that has to move needs time to find premises and fit them out.

Sections 108 to 111 deal separately with preferential renewal rights for qualifying shopping centre leases.

Those rules apply where the lessor proposes to re-let the premises and the tenant wants to renew, and they can be excluded by a certified exclusionary clause under section 111.

Can a Landlord Refuse Consent to an Assignment?

A lessor can refuse consent to an assignment or sublease only where refusal is reasonable in all the circumstances.

Reasonable grounds include the proposed tenant intending to use the premises for a purpose outside the permitted use, or lacking adequate business skills to run the business, adequate financial standing, or a good reputation.

A refusal based on the landlord simply preferring a different tenant, or wanting to reset the rent, is unlikely to meet that test.

Tenants selling a business should start the consent process early, because settlement usually depends on it.

How Are ACT Commercial Lease Disputes Resolved?

Disputes under the Act are heard by the ACT Magistrates Court, not by the ACT Civil and Administrative Tribunal, which surprises people used to the Retail Leases Act in New South Wales, the Retail Leases Act in Victoria or the Retail Shop Leases Act in Queensland.

The court must hold a case management meeting, where the parties meet together with a registrar, and it can also use mediation, conciliation or another resolution process.

Appeals from those decisions go to the ACT Supreme Court.

Several applications carry strict time limits, so a party who waits to see whether the problem resolves itself can lose the right to raise it at all.

The Act also prohibits conduct that is unconscionable or harsh and oppressive by either party, in dealings under a lease and in negotiations for one.

Separately, a tenant can claim reasonable compensation where the lessor materially inhibits access to the premises, disrupts customer flow, or otherwise damages the tenant’s trade.

A dated record of what happened, and what it cost, is what a compensation claim is generally built on.

Why Does the Act Matter More in the Current Canberra Market?

Canberra’s office vacancy rate rose from 10.2 per cent to 14.7 per cent over the six months to mid 2026, according to the Property Council of Australia.

Vacancy in Civic more than doubled over the same period, moving from 12.0 per cent to 26.4 per cent, while the non Civic market barely shifted.

Those figures cover the office market rather than Canberra retail or commercial property generally, but a market with that much empty space may strengthen a tenant’s negotiating position.

Tenants with choice may push for shorter commitments, larger incentives and more flexible make good obligations.

Landlords may respond by asking for section 104 certificates so a short term stays short, and by tightening outgoings recovery to protect returns.

Both moves are lawful, and both need to be documented properly to hold up later.

Either way, the tenants in the strongest position are the ones who know which of their rights apply automatically and which they are being asked to sign away.

Is the Act Still Current?

The version of the Act now in force is republication R27, which took effect on 26 December 2025.

It was amended by the Education and Care Services National Law (ACT) Amendment Act 2024, commencing 11 July 2024, and by the Statute Law Amendment Act 2025, commencing 26 December 2025.

Older summaries of ACT leasing law still circulate online, including material written during the pandemic era rent relief schemes that have since ended.

Checking the republication date on the ACT Legislation Register before relying on any summary is a small step that avoids a large problem.

Need Help With an ACT Commercial or Retail Lease?

ACT commercial lease law gives covered tenants real protections around term, disclosure, bonds, rent reviews and outgoings, and it makes several common lease clauses void whether or not the parties agreed to them.

Whether you are signing, renewing, assigning or arguing about one, the detail of the Act is what decides the outcome.

As commercial leasing lawyers acting for landlords and tenants across Australia, my law firm can review, draft and negotiate your lease at a fixed fee agreed before the work starts.

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

Frequently Asked Questions

Does the Leases (Commercial and Retail) Act 2001 apply to office leases in the ACT?

Yes, if the office is small commercial premises with a lettable area of no more than 300 square metres. Offices above that size fall outside the Act unless they fit another listed category, such as premises leased to an incorporated association or a charity. Larger office tenants rely on their lease terms and general contract law instead.

Can an ACT commercial lease be for less than five years?

Yes. Section 104 gives the tenant a right to extend the total term to five years, but the tenant has to exercise it. The right does not apply where the tenant received independent legal advice before entering into the lease from a lawyer neither acting for nor nominated by the lessor. Continuous occupation leases and qualifying option renewals are also excluded.

How do you find out whether an ACT landlord will renew a lease?

Section 107 lets the tenant ask the lessor in writing. For a lease longer than one year, the request can be made when six to twelve months remain. For any other lease, the window is three to six months before expiry. The lessor must answer in writing within one month, and a late answer extends the lease by the period of the delay.

What is the maximum bond on an ACT commercial lease?

Section 39 limits a bond to the rent payable under the lease for any three month period nominated by the lessor. Rent paid in advance beyond three months counts towards that cap rather than sitting outside it. A lessor also cannot unreasonably refuse a bank guarantee offered in place of a cash bond.

Which court hears ACT commercial lease disputes?

The ACT Magistrates Court hears disputes under the Leases (Commercial and Retail) Act 2001, rather than the ACT Civil and Administrative Tribunal. The court must hold a case management meeting with a registrar and can use mediation or conciliation. Strict time limits apply to some applications, so raising a problem early matters.

Are discretionary rent review clauses allowed in the ACT?

No. Section 46 voids a discretionary rent review clause, which covers clauses letting one party pick the review method, take the highest of several methods, or stop rent falling. Section 47 separately voids clauses allowing rent to change more than once in each 12 month period after the first anniversary, subject to listed exceptions.