Retail and Commercial Leases Act 1995 (SA): Complete Guide

The Retail and Commercial Leases Act 1995 (SA) sets the minimum standards for retail shop leases in South Australia, and it applies where premises are used to sell goods by retail or supply services to the public and the rent is at or below $420,000 a year excluding GST.

Covered tenants get a five year minimum term, a disclosure statement, limits on rent reviews, bond protection and a ban on paying the landlord’s land tax.

The name of the Act is misleading though, and two rounds of change during 2025 moved both the coverage line and the way disputes are handled.

What Does the Retail and Commercial Leases Act 1995 (SA) Cover?

The Act covers retail shop leases in South Australia, and it decides what counts as a retail shop by looking at how the premises are used rather than what the building is called.

Section 3 of the Retail and Commercial Leases Act 1995 defines a retail shop as business premises where goods are sold to the public by retail, or where services are supplied to or negotiated with the public.

That definition is much wider than the word shop suggests.

A hairdresser, a physiotherapy clinic, a gym, a café, a travel agency and a repair workshop can all sit inside the Act, even though none of them looks like a shopfront in a mall.

The Small Business Commission puts the test plainly in its official retail and commercial leasing guidance: it is your use of the premises that determines whether or not your lease is subject to the Act, not the zoning or the description in the lease.

Why Is the Act Called Retail and Commercial?

The title reflects the fact that South Australia regulates a broad slice of small business tenancies under one statute rather than carving retail off from everything else.

The retail leases legislation in New South Wales, the Retail Leases Act in Victoria and the retail shop leases regime in Queensland each carry the word retail alone on the label, which is why tenants who move between states often assume the South Australian rules are narrower than they are.

In practice the operative test is still the retail shop definition in section 3, so the difference between a commercial lease and a retail lease still matters and the word commercial in the title does not automatically pull in offices, warehouses and factories.

Premises used only for storage, manufacturing or back office work, with no goods sold and no services supplied to the public, generally fall outside the Act.

The grey area sits with service businesses, where the question is whether the premises are used to supply services to the public or negotiate them with the public.

When Does the Act Not Apply to a Lease?

Section 4 lists the situations where the Act is switched off, and the rent threshold is only one of them.

The Act does not apply where the rent exceeds the prescribed threshold, where the lease runs for one month or less, or where the right to occupy comes from a contract of sale or a mortgage rather than a lease.

It also does not apply where the tenant is an authorised deposit-taking institution, an authorised insurer, a Crown or council body, or a public company or a subsidiary of one, with separate treatment for public charitable companies depending on when the lease was entered into.

A further exclusion was added for leases entered into on or after 1 July 2025 where the tenant is a body corporate incorporated outside Australia or a body controlled by one, which replaced an older test based on stock exchange listing.

The Retail and Commercial Leases Regulations 2025 exclude a further list, including some local government leases to charities and non-profit bodies where the rent is $50,000 a year or less, leases of the National Railway Museum at Port Adelaide, leases where the Aboriginal Lands Trust is the landlord, and leases between related corporate entities.

Checking section 4 and the regulations before you rely on any protection in this article is worth the ten minutes it takes.

What Changes When the Act Applies to Your Lease?

When the Act applies, seven parts of the deal stop being purely a matter of negotiation and become statutory minimums that override anything the lease says to the contrary.

The practical effect is that a landlord cannot draft around the Act.

Section 5 states that the Act overrides leases, so a clause that conflicts with a protection above simply does not work, even if both parties signed it and understood it.

That is why the coverage question in the section above matters more than any other question in South Australian leasing.

What Happens if the Rent Crosses the Threshold During the Lease?

The Act can start applying part way through a lease if the rent falls at or below the threshold, and this was settled by the Supreme Court of South Australia in Diakou Nominees Pty Ltd v Gouger Street Pty Ltd [2017] SASC 72.

In that case a hotel had been leased at a rent above the threshold that applied when the lease began, so the Act did not cover it.

When the threshold was raised in 2011 the rent fell below the new figure, and Justice Stanley held that the Act picked the lease up from that date.

The consequences were immediate for the landlord, because land tax could no longer be recovered from the tenant and the rent ratchet clause stopped working.

Parliament has since given landlords a narrow way to lock in certainty through section 4(3), which keeps a lease outside the Act even if the threshold later rises or the rent later drops.

Four conditions all have to be met: the rent must exceed the threshold at the time the lease is lodged for registration, the landlord must lodge it within three months after both parties execute it, the landlord must give the tenant written notice of lodgement within one month, and the lease must remain registered for its term.

A renewal of a qualifying lease has its own deadline and must be lodged no later than two months after the day the earlier lease would have expired.

The safe harbour does not reach leases entered into before the current section 4 commenced in 2020, or renewals made under options granted by those older leases, so registration is a live decision only for leases that start above the threshold rather than for every lease sitting near it.

What Is the Current Rent Threshold in South Australia?

The prescribed threshold is $420,000 a year excluding GST.

It rose from $400,000 on 1 July 2025 under the Retail and Commercial Leases (Prescribed Threshold) Amendment Regulations 2024, the first movement in the figure since 2011, and regulation 4 of the Retail and Commercial Leases Regulations 2025 carried the same amount forward from 1 September 2025.

Section 4 of the Act still names $400,000 as the base figure and allows a higher amount to be prescribed by regulation, so the Act and the regulations have to be read together to get the right number.

The Act also makes the Valuer-General responsible for reviewing the threshold, so the figure is designed to move over time rather than sit still for another fourteen years.

Leases sitting close to $420,000 should be checked at every rent review, because a single increase can push a lease out of the Act and take its protections with it.

How Long Must a Retail Shop Lease Run in South Australia?

A retail shop lease must run for at least five years under section 20B, and options to renew count towards that total.

A three year term with a two year option meets the requirement, and so does a one year term with two separate two year options.

Section 20B(2) says a shorter lease is not invalid, but its term is extended to bring the total up to five years, which can leave a landlord holding a tenant they expected to be able to move on.

The rule exists because fitting out a shop is expensive, and a tenant who spends heavily on a fitout needs enough time to earn that money back.

Section 20B(3) sets out six exceptions, covering short-term leases of six months or less, a lease that arises when the tenant holds over after an earlier lease ends, a lease containing a certified exclusionary clause, a tenant who has already been in possession for at least five years, a sublease that runs as long as the head lease allows, and a lease of a class excluded by regulation.

Regulation 8 of the 2025 regulations fills in that last category, and it covers leases to certain family members of the landlord and certain leases granted by non-profit bodies.

What Is a Certified Exclusionary Clause?

A certified exclusionary clause is the formal way a tenant agrees to a lease shorter than five years, and it only works if an independent solicitor or the Small Business Commission certifies it under section 20K.

The person certifying has to confirm that the five year rule was explained to the tenant and that the tenant gave credible assurances they were not acting under coercion or undue influence.

That second limb is the one landlords underestimate, because a certificate obtained under pressure at the eleventh hour is exactly what the section is designed to catch.

Tenants should treat the certification meeting as a real opportunity to ask what they are giving up rather than a form to sign.

Without a valid certificate, the shorter term simply does not hold.

What Must a Landlord Give a Tenant Before Signing?

A landlord must give the tenant a copy of the proposed lease and the Small Business Commission’s information brochure on retail shop leases under section 11, along with a disclosure statement under section 12, and these have to arrive before the tenant is asked to sign.

The disclosure statement sets out the rent, how rent increases will be calculated, every outgoing the tenant may have to pay, the permitted use of the premises, the term and any option to renew.

Penalties can apply to a landlord or agent who does not provide these documents.

A defective disclosure statement can also have consequences that run for years, because section 45A ties the release of an outgoing tenant after an assignment to the disclosure statement given to the assignee.

Section 14 limits what a landlord can charge a tenant for preparing the lease, and section 15 prohibits a premium, which stops key money being demanded for the grant of a lease.

Where the landlord has notice that the tenant needs the premises for a particular business, section 18 implies a warranty that the premises will be structurally suitable for that purpose for the term of the lease, which is narrower than a general promise that the site suits every part of the tenant’s plans.

A landlord can exclude that warranty by written notice before the tenant signs, and since 1 July 2025 the exclusion carries through to a renewal or extension and to a later lease of the same premises between the same parties, so a fresh notice is not needed each time.

How Does the Act Control Rent Reviews?

Section 22 controls how often base rent can change and stops the review methods that only ever favour the landlord.

Base rent cannot be changed within 12 months of the start of the lease or within 12 months of a previous change, unless the change is to a specified dollar amount or a specified percentage set out in the lease.

A clause that lets one party choose which of two or more methods applies is void, and so is a clause requiring the rent to move by whichever method produces the higher figure.

The familiar CPI or five per cent, whichever is greater formula therefore does not survive in a South Australian retail shop lease, and section 22 of the Act also voids any clause that prevents a rent decrease where the review method could otherwise produce one.

Where the lease calls for a market review and the parties cannot agree, the valuer is appointed by agreement or, failing agreement, by the person holding or acting in the office of Chair of the South Australian State Committee of the Australian Property Institute, with the cost shared equally between the parties.

The valuer assesses the premises as if they were unoccupied, ignoring the tenant’s goodwill and the tenant’s own fixtures and fittings, which prevents a tenant being charged more because they built a successful business in the space.

What Outgoings Can a Landlord Recover, and Can They Charge Land Tax?

A landlord cannot charge land tax to a retail shop tenant, and section 30 of the current version of the Act says a lease cannot require the tenant to pay it or to reimburse the landlord for paying it.

Land tax can still be taken into account when the rent itself is assessed, so it may be built into the rent figure, but it cannot appear as a separate line item charged to the tenant.

One historic exception survives, because regulation 11 fixes 15 November 1990 as the cut-off date and section 30 does not apply to a retail shop lease entered into before then.

Section 26 controls everything else, and a landlord can only recover an outgoing where the lease specifies the outgoing, how it is calculated and how it is apportioned.

That makes the outgoings entries in the lease and the disclosure statement the most useful pages a tenant can read when working out the real cost of a site.

Section 31 requires the landlord to give estimates of outgoings at least one month before each accounting period, and section 32 requires a report on what was actually spent within three months after the period ends.

That report has to be prepared by a registered company auditor unless it covers nothing beyond the emergency services levy, water and sewerage rates and charges, local government rates and charges and insurance, in which case receipts can be supplied with it instead.

Contributions are then adjusted against actual expenditure under section 33, and in a retail shopping centre section 34 caps a tenant’s share of non-specific outgoings, meaning outgoings not referable to any particular shop, by the ratio their lettable area bears to the total lettable area of the shops the outgoing relates to.

The landlord has to provide that report without being asked, so a tenant who has not received one is entitled to chase it.

How Do Security Bonds and Bank Guarantees Work Under the Act?

A security bond under a retail shop lease is capped at three months’ rent excluding GST, and it must be lodged with the Small Business Commission rather than held by the landlord.

A landlord who receives the bond directly has seven days to lodge it, and a registered agent has 28 days, with penalties for failing to do so.

Once the tenant has completed its make good and other obligations at the end of the lease, either party can apply to the Commission under section 20 for the bond to be paid out, and a joint application, or one asking for the whole bond to go to the other side, is simply paid.

Any other application can be disputed, so the Commission notifies the other party, who has 14 days to lodge a written notice of dispute, and a dispute lodged in time is referred to the Magistrates Court for determination.

The two month deadline that applies to bank guarantees does not apply to a cash bond, so a tenant who wants their money back should lodge the application rather than wait for the landlord to start the process.

Where a bank guarantee is used instead of a cash bond, section 20AA requires the landlord to return it within two months after the tenant finishes performing its obligations, which closes off the old practice of holding a guarantee indefinitely after a lease ended.

What Happens When the Lease Nears Its End?

The Act forces the renewal conversation to happen early, and the rules differ depending on whether the shop sits inside a retail shopping centre.

A retail shopping centre under section 3 is a cluster of premises where at least five are retail shops, all owned by the same person, in one building or in buildings that adjoin one another or are separated only by common areas or other land owned by that owner, and promoted or generally regarded as a shopping centre, shopping mall, shopping court or shopping arcade.

Where the landlord proposes to re-let premises in a shopping centre and the existing tenant wants to renew, section 20D requires the landlord to give that tenant preference over other possible tenants, and the tenant is presumed to want a renewal unless they notify the landlord in writing within the 12 months before the term ends that they do not.

The preference is not absolute, and section 20D(3) lets a landlord withhold it where the tenancy mix is changing, where the tenant has substantially breached the lease, where the premises are to be demolished, where the landlord needs vacant possession for its own purposes, where renewal would disadvantage the landlord, or where the regulations exclude the right.

Where the preference applies, the landlord must begin negotiations between six and 12 months before expiry.

Outside a shopping centre, where the lease carries no right of renewal, the landlord must give the tenant written notice of their intentions not less than six months and not more than 12 months before the lease is due to expire.

The Act sets out consequences where a landlord does not begin negotiations or give notice within these windows, so diary dates for a retail lease should be set from the expiry date working backwards, not forwards from the current rent review.

Can You Assign a Retail Shop Lease in South Australia?

You can assign a retail shop lease with the landlord’s consent, and the Act limits the reasons a landlord can refuse.

Under section 43, consent can be withheld where the proposed assignee intends to change the use of the premises, where the proposed assignee is unlikely to be able to meet the tenant’s financial obligations under the lease, or where the proposed assignee’s retailing skills are inferior to those of the assignor.

The assignor must give the assignee a copy of the disclosure statement, and the landlord is treated as having consented if they do not respond within 42 days of a properly made request.

Section 44 prohibits a premium being charged for consent, so a landlord cannot treat an assignment as an opportunity to extract a payment.

Under section 45A the outgoing tenant and any guarantor are released from the lease at the earliest of the second anniversary of the assignment, the expiry of the lease, or the start of a renewal or extension, unless the disclosure statement was not provided to the assignee or contained materially false information.

That two year release is one of the strongest protections in the Act for a business owner selling a shop, and it is routinely missed.

What Changed in the Act During 2025?

Two amending Acts and a new set of regulations took effect during 2025, and together they changed coverage, warranties, dispute resolution and the threshold.

The Statutes Amendment (Small Business Commission and Retail and Commercial Leases) Act 2024 commenced on 1 July 2025 and replaced the old stock exchange listing test in section 4 with a test based on incorporation outside Australia, which is far easier for a landlord to verify.

The same Act inserted section 18(2a), so a notice excluding the warranty of fitness for purpose now carries through to renewals and later leases between the same parties for the same premises.

It also rebuilt Part 9, broadening the Commission’s dispute resolution role beyond lease disputes to disputes about the occupation of premises, making statements in dispute resolution inadmissible in court, and giving the Commission power to require attendance, require documents and issue certificates, with written settlement agreements enforceable through the Magistrates Court.

A second change came from the Statutes Amendment (Tobacco and E-Cigarette Products Closure Orders and Offences) Act 2025, in force from 5 June 2025, which allows a lease affected by a long term closure order to be terminated on at least 28 days’ written notice.

Alongside those, the threshold moved to $420,000 on 1 July 2025 and the Retail and Commercial Leases Regulations 2025 came into operation on 1 September 2025, replacing the 2010 regulations.

How Do You Resolve a Retail Lease Dispute in South Australia?

Most retail lease disputes are taken to the Small Business Commission first, and its service is currently free, though a party can also start proceedings in the Magistrates Court under section 68 rather than going to the Commission.

The Commission runs three stages, starting with initial assistance from a case manager, moving to pre-mediation discussions between the parties, and then to formal mediation with an external professional mediator if the matter has not settled.

Under section 68A a settlement is enforceable where the outcome is recorded in writing and signed by the parties and by the Commission, so a mediated result is more than a handshake.

Section 66A lets the Commission require a party to attend a designated alternative dispute resolution process and to produce documents, subject to protections for privileged and confidential commercial material, and the Commission can issue certificates recording what happened.

Section 68 gives the Magistrates Court jurisdiction over disputes under the Act, and section 65 allows those proceedings to be stayed while dispute resolution runs, so the two paths are not mutually exclusive.

What Should South Australian Tenants and Landlords Check Before Signing?

Check coverage first, because every other protection depends on it, and coverage turns on the use of the premises and the rent figure rather than on what the lease is called.

The pool of businesses that may need to ask that question is large, with around 160,000 South Australian businesses employing fewer than 20 staff, which the Department for State Development puts at about 97 per cent of all businesses in the state, though only those occupying qualifying retail premises will be covered.

Market conditions shape how much room there is to negotiate, and for anyone taking office space the Property Council of Australia recorded an Adelaide CBD office vacancy rate of 16.3 per cent in its July 2026 Office Market Report, up from 15.5 per cent six months earlier.

Retail premises follow their own local conditions rather than the office market, so a shop, café or clinic tenant should compare rents in their own strip or centre instead.

From there, work through a short list: confirm the disclosure statement is complete and accurate, test the rent review clause against section 22, make sure land tax is not being passed on, confirm the bond has actually been lodged with the Commission, and check whether the total term including options reaches five years.

Landlords should be asking the same questions from the other side, along with whether registering the lease is worth doing to fix the position on the threshold.

Reading the Small Business Commission’s leasing guide alongside the lease is a sensible first step for either party, though it is a guide rather than advice on your particular agreement.

Need Help With a Retail or Commercial Lease in South Australia?

The Retail and Commercial Leases Act SA gives tenants real protection, but only where the lease is checked against the Act before anyone signs, and the 2025 changes mean older precedent documents are now out of date.

As commercial lease lawyers in Adelaide, my law firm reviews retail and commercial leases at a transparent fixed fee, so you know exactly what the Act does and does not give you before you commit.

Call 1300-529-888 to talk through your lease.

Frequently Asked Questions

Does the Retail and Commercial Leases Act apply to office and warehouse leases in SA?

Usually not. The Act covers retail shop leases, which section 3 defines as premises where goods are sold by retail or services are supplied to or negotiated with the public. A pure office, warehouse or manufacturing site with no public dealings normally sits outside it, while a clinic, salon or studio serving the public is often covered.

What is the rent threshold for the Retail and Commercial Leases Act in South Australia?

The threshold is $420,000 a year excluding GST. It rose from $400,000 on 1 July 2025 under amending regulations made in 2024, and regulation 4 of the Retail and Commercial Leases Regulations 2025 carried the same figure forward. Where rent under a retail shop lease sits above that figure, the Act does not apply and the lease runs on its own terms and the general law.

Can a South Australian landlord make a tenant pay land tax?

No. Section 30 says a retail shop lease cannot require the tenant to pay land tax or to reimburse the landlord for paying it. Land tax can still be taken into account when the rent is assessed, so it may be reflected in the rent figure, but it cannot be charged to the tenant as a separate outgoing.

Can a retail shop lease in South Australia be shorter than five years?

Yes, but only in limited cases. Section 20B requires a minimum five year term including options, and section 20B(3) sets out six exceptions: short-term leases of six months or less, a lease arising when the tenant holds over, a certified exclusionary clause, a tenant already in possession five years, a sublease as long as the head lease allows, and leases excluded by regulation.

How do you resolve a retail lease dispute in South Australia?

Most parties start with the Small Business Commission, which offers initial assistance, pre-mediation and formal mediation at no cost, and a settlement recorded in writing and signed under section 68A is enforceable. A party can also go straight to the Magistrates Court under section 68, and section 65 allows those proceedings to be stayed while dispute resolution runs.