Entering a commercial property lease in Western Australia requires careful navigation of both general property law and the state’s specific retail leasing regime. While many principles are consistent across Australia, WA has a distinct legislative framework that landlords and tenants must understand.
- Retail vs Non-Retail Leases in WA
A key threshold issue is whether the lease falls within the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (CT Act). This Act applies primarily to smaller retail businesses, including shops in shopping centres or premises predominantly used for retail sales or specified services.
If the lease is captured by the CT Act, mandatory protections apply. If not, the lease is governed largely by common law and the Transfer of Land Act 1893 (WA), giving parties greater contractual flexibility.
- Mandatory Disclosure and Transparency
WA places strong emphasis on pre-lease disclosure. Landlords must provide key documents—including a disclosure statement, tenant guide and proposed lease—at least seven days before the lease is entered into.
Failure to comply can expose landlords to disputes or affect enforceability. For tenants, these documents are critical in understanding total occupancy costs, including outgoings and rent review structures.
- Minimum Lease Term and Tenant Protections
One of the defining features of the WA regime is the statutory right to a minimum five-year lease term (subject to waiver). This is designed to give small businesses sufficient time to establish themselves.
The CT Act also:
- Regulates rent reviews and operating expenses
- Restricts certain landlord rights (e.g. relocation and refurbishment clauses)
- Prohibits unconscionable, misleading or deceptive conduct
These protections reflect the Act’s core objective of addressing bargaining power imbalances between landlords and small business tenants.
- Rent, Outgoings and Review Mechanisms
Rent review provisions remain a key commercial risk area. In WA retail leases, the Act imposes rules around how rent can be reviewed and what costs can be passed on to tenants.
Tenants should pay close attention to:
- Outgoings (including marketing levies and operating costs)
- Turnover rent provisions
- Timing and method of rent reviews
Clarity in drafting is essential to avoid disputes and unexpected financial exposure.
- Assignment, Make Good and Exit Strategy
As with any commercial lease, WA tenants should carefully consider their exit strategy. Key clauses include:
- Assignment and subletting rights
- Personal guarantees
- “Make good” obligations at lease end
These provisions can have significant financial consequences and should be negotiated early.
- Dispute Resolution in WA
A notable feature of the WA system is its structured dispute resolution pathway. Disputes under retail leases are typically referred first to the Small Business Commissioner for mediation, before escalation to the State Administrative Tribunal (SAT) if required.
This provides a relatively accessible and cost-effective mechanism compared to traditional court proceedings.
- Recent Developments and Reform Outlook
Commercial leasing law in WA is currently under active review. A statutory review of the CT Act was tabled in Parliament in October 2024, with recommendations aimed at improving fairness, transparency and flexibility in leasing arrangements.
Key areas under consideration include:
- Enhanced disclosure obligations
- Rent review practices and lease costs
- Early termination rights (e.g. for financial hardship)
- Broader application of the Act to service-based businesses
- Streamlined dispute resolution
Draft legislative amendments are expected to be progressed from 2026 onward.
What This Means for You
For WA landlords and tenants, commercial leases are increasingly shaped by statutory protections and ongoing reform. The distinction between retail and non-retail leases is critical, and compliance with disclosure and procedural requirements is essential.
Given the likelihood of legislative change in the near term, now is an opportune time to review existing leases or seek advice before entering new arrangements. A well-structured lease, aligned with both current law and anticipated reforms, can significantly reduce risk and improve commercial outcomes.
About the Author: This article has been authored by Steven Brown.
