Rent and premises issues are a common source of conflict for small businesses in Victoria. When a lease dispute arises, understanding the available pathways, particularly through the Victorian Small Business Commission (VSBC) and VCAT can save time and cost.
Typical Lease Disputes We See
Disputes can arise between landlords and tenants about:
- Responsibility for repairs and maintenance
- Rent reviews and outgoings
- Options to renew and exercise of options
- Make-good obligations at the end of the lease
- Alleged breaches, including late payment or unauthorised use
- Access, fit-out or trading hours
The starting point is always the written lease, but legislation such as the Retail Leases Act 2003 (Vic) and Property Law Act 1958 (Vic), and related regulations may also apply.
The Role Of The Victorian Small Business Commission
For many retail and commercial lease disputes, parties must first attempt mediation through the VSBC before going to VCAT or a court. The VSBC:
- Provides low-cost, confidential mediation
- Helps parties narrow the real issues in dispute
- Can issue a certificate if mediation does not resolve the matter, allowing the matter to proceed further
Mediation can be an opportunity to reset the relationship, especially where both landlord and tenant want the business to continue trading.
When The Dispute Goes To VCAT
If mediation does not resolve the dispute, it may proceed to VCAT. VCAT can:
- Determine whether there has been a breach of the lease
- Make orders for payment of money, repairs, or other remedies
- Resolve many issues more quickly and informally than a traditional court
Even at this stage, many matters settle at or before the hearing once the issues and evidence are clear.
Practical Steps For Tenants And Landlords
If a dispute is developing:
- Read the lease carefully, including any disclosure statement and variations
- Collect emails, letters, photographs and reports about the issue
- Keep paying rent where possible, even if you are in dispute on other items, without first obtaining advice
- Avoid self-help measures, such as changing locks or stopping essential services, without advice
- Consider whether a negotiated variation to the lease could resolve the problem
Clear communication can prevent misunderstandings from escalating.
Impact Of Financial Stress And Insolvency
The current environment has seen an increase in insolvency appointments and business closures, which often involve lease issues. Landlords and tenants may need to consider:
- How rent arrears will be treated in a restructure or liquidation
- Whether any personal guarantees support the lease
- The cost of re-letting versus reaching a sensible compromise
Early legal advice can help frame proposals that are realistic and protect rights if the business fails.
How Scherini Lawyers Can Help
We act for both landlords and tenants in industrial, commercial and retail lease disputes across Victoria. Our focus is on clear advice, effective use of VSBC mediation, and strong representation in VCAT and the courts where required.
If you are facing a lease dispute or need help preparing for VSBC mediation, call 03 9961 3149 or email info@scherinilawyers.com.au.
This article provides general information only and should not be treated as legal advice. You should obtain professional advice before acting.
