NEWS & UPDATES
Victorian Court Backs Rent Review Caps in Retail Leases
Landmark ruling provides clarity for landlords and tenants
In a significant ruling, the Supreme Court of Victoria in ALDI Foods Pty Ltd v Northcote Shopping Centre Pty Ltd [2024] confirmed that rent review caps in retail leases are valid under the Retail Leases Act 2003 (Vic). This decision overturns earlier interpretations by the Victorian Civil and Administrative Tribunal (VCAT) that such caps were unenforceable. The court held that caps do not undermine the Act’s intent and can lawfully be included in lease agreements.
Why it matters for businesses:
Rent predictability allows tenants to budget more effectively for store refurbishments, upgrades, and defit obligations at the end of lease. It also reduces financial uncertainty for landlords managing long-term tenancy agreements.
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