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

From 1 July 2025 the prescribed threshold is $420,000 per annum exclusive of GST, up from $400,000. Where the rent exceeds the threshold the Act does not apply. Because the threshold moved, some existing leases with rent between $400,000 and $420,000 that were outside the Act on 30 June 2025 came within it on 1 July 2025.

Does a retail shop lease in South Australia have to be for five years?

Ordinarily yes. Section 20B requires a retail shop lease to be for a term of at least five years, calculated on the assumption that any option to renew or extend will be exercised — so a three-year term with a two-year option qualifies. A shorter term is possible only where the tenant obtains and gives the landlord the prescribed certificate from an independent legal adviser.

Can a landlord charge land tax to a retail tenant in SA?

No. Section 30 prohibits a retail shop lease from requiring the tenant to pay land tax or to reimburse the landlord for it. The landlord's land tax liability may be taken into account in assessing the rent, but it cannot be recovered as a separate outgoing. Outgoings schedules borrowed from other states frequently get this wrong.

How much notice must a landlord give about renewing a retail lease?

Section 20J requires the landlord to give the tenant written notice of the landlord's intentions at the end of the lease at least six months, and not more than 12 months, before expiry. If you hold an option, note that it is usually exercisable only within a defined window and strictly in accordance with the lease — an option exercised late is generally ineffective.

Does the fitness-for-purpose warranty apply again when a lease is renewed?

Not if it was excluded. Section 18 implies a warranty that the premises are fit for the purpose for which they are let and allows a landlord to exclude it by notice. From 1 July 2025, section 18(2a) provides that an exclusion notice extends to any renewal or extension of the lease and to a subsequent lease between the same parties for the same premises, so a fresh lease does not revive the warranty.

How are retail lease disputes resolved in South Australia?

Sections 63 to 68A give the Small Business Commission a role in alternative dispute resolution for leasing disputes. Reforms commencing 1 July 2025 broadened its jurisdiction, added confidentiality protections and compulsory attendance requirements, and made written agreements reached through that process enforceable in the Magistrates Court. For most outgoings, repair and rent review disputes it is the sensible first step before litigation.

Retail Leases SA: A Tenant Guide 2026

Q: What is a disclosure statement and when must I receive it?

Under section 12 the landlord must give the tenant a disclosure statement for the lease, signed by or on behalf of the landlord, before the retail shop lease is entered into. The tenant must return a signed acknowledgement of receipt within 14 days. The statement sets out outgoings, trading hours, fitout obligations and other terms, and is the quickest way to see the difference between the headline rent and the real annual cost.

Q: Can a landlord exclude the Act from applying to a lease?

Yes, in defined circumstances. Under section 4(3) a landlord who registers the lease within three months of execution and gives the tenant written notice within one month of lodgement can exclude the Act's operation for the term. Since 1 July 2025 the Act also does not apply where the tenant is a body corporate incorporated outside Australia or is controlled by such an entity.

For most small businesses, the lease is the largest financial commitment the business will ever make and the one least likely to have been read closely. A five-year term at $60,000 a year is a $300,000 obligation, usually personally guaranteed, frequently signed under time pressure because the fitout is booked and the opening date has been advertised.

South Australia does more than most states to protect tenants in that position. The Retail and Commercial Leases Act 1995 (SA) implies a set of terms into retail shop leases that a landlord cannot draft around. But those protections are not universal. They depend on whether your lease is caught by the Act at all, and the boundary moved on 1 July 2025.

First Question: Does the Act Even Apply?

The Act applies to retail shop leases, and its protections fall away where the rent exceeds what the Act calls the prescribed threshold. On 1 July 2025 that threshold rose from $400,000 to $420,000 per annum, exclusive of GST.

That change did more than update a number. Because the threshold is tested by reference to rent, an existing lease sitting between $400,000 and $420,000 that was outside the Act on 30 June 2025 came within it on 1 July 2025. For a landlord, that is a significant shift: from that date the lease can no longer be used to recover land tax, a ratchet clause cannot be relied upon, and the tenant cannot be required to undertake capital expenditure. Both parties to a lease near the threshold should check where they now sit rather than assuming the position has not changed.

There is also a mechanism by which a landlord can put a lease outside the Act for its whole term. Under section 4(3), a landlord who registers the lease within three months of execution and gives the tenant written notice within one month of lodgement can exclude the Act's operation. A tenant who is told the Act does not apply should ask precisely why, because the answer is either the threshold or this provision, and both are checkable.

From 1 July 2025 there is a further carve-out: the Act no longer applies where the tenant is a body corporate incorporated outside Australia, or is controlled by such an entity. This replaced the older exclusion framed around stock exchange listing, and it is broader.

The Five-Year Minimum

Section 20B provides that a retail shop lease must ordinarily run for a term of at least five years. The term is calculated on the assumption that any option to renew or extend will in fact be exercised, so a three-year term with a two-year option satisfies the requirement.

The point of the provision is to protect a tenant's investment. A business that spends $150,000 on a fitout and two years building local trade should not be exposed to being moved on at the end of a short term. A shorter term is possible, but only where the tenant obtains and provides the prescribed certificate from an independent legal adviser. If you are being asked to sign a two-year lease with no option, that certificate requirement is the reason, and it exists to make sure you have understood what you are giving up.

The Disclosure Statement

Before a retail shop lease is entered into, the landlord must give the tenant a disclosure statement for the lease, signed by or on behalf of the landlord, under section 12. The tenant must return a signed acknowledgement of receipt within 14 days.

The disclosure statement is the commercial counterpart of the Form 1 in a property sale: it sets out, in a standard format, the outgoings the tenant will be responsible for, the trading hours, the fitout obligations, and the other terms that determine what the lease will really cost. Read alongside the lease itself, it is the fastest way to find the gap between the headline rent and the actual annual outlay. Where a disclosure statement is not provided, or is materially deficient, that is not a technicality — it goes to the tenant's rights under the Act.

Land Tax Cannot Be Passed On

Section 30 prohibits a retail shop lease from requiring the tenant to pay land tax, or to reimburse the landlord for land tax. The landlord's land tax liability may be taken into account in setting the rent, but it cannot appear as a separate recoverable outgoing.

This is one of the more commonly breached provisions, usually through a general outgoings clause drafted for another jurisdiction and never adjusted for South Australia. If your outgoings schedule lists land tax, that line is unenforceable in a lease the Act covers, and it is worth raising before you sign rather than after you have paid it for three years.

The End of the Lease Is Where Tenants Get Hurt

Most disputes we see do not arise at signing. They arise in the final year, when a tenant assumes the lease will roll on and the landlord has other plans.

Section 20J requires a landlord to give the tenant written notice of the landlord's intentions at the end of the lease — whether a renewal will be offered and on what terms — at least six months, and not more than 12 months, before the lease expires. That notice exists to give a tenant enough runway to negotiate, to plan a relocation, or to decide whether to sell the business while the lease still has value.

If you hold an option, diarise the exercise window the day you sign, not the year it falls due. Options are usually exercisable only within a defined period and strictly in accordance with the lease, and an option exercised a week late is generally no option at all. Holding over past expiry without addressing renewal is the other common trap: a monthly tenancy suits a landlord considering redevelopment far better than it suits a tenant with a fitout in the ground and a business to sell.

Two Changes From 2025 Worth Knowing

Section 18 implies a warranty that the premises are fit for the purpose for which they are let, and permits a landlord to exclude that warranty by notice. From 1 July 2025, section 18(2a) provides that such an exclusion notice extends to any renewal or extension of the lease, and to a subsequent lease between the same parties for the same premises. A tenant who assumed a fresh lease meant a fresh warranty should not.

Separately, from 5 June 2025, where a long-term closure order is made under the tobacco and e-cigarette legislation, either party to a retail shop lease may terminate on 28 days' notice. That is a narrow provision, but for the retail sectors it touches it is a material change to the risk allocation in a lease.

Disputes: Start With the Small Business Commission

Leasing disputes rarely justify the cost of litigation, and the Act reflects that. Sections 63 to 68A give the Small Business Commission a role in alternative dispute resolution, and reforms commencing 1 July 2025 broadened its jurisdiction, added confidentiality protections, introduced compulsory attendance requirements, and made written agreements reached through that process enforceable in the Magistrates Court.

For a tenant in dispute over outgoings, repairs or a rent review, that is usually the sensible first step. It is faster and considerably cheaper than a court, and an agreement reached there now has teeth.

How Zed Legal Can Help

We act for both tenants and landlords on commercial and retail leasing in South Australia. For tenants, that means reviewing the lease and disclosure statement together before you commit, confirming whether the Act applies to your lease, checking outgoings against section 30, diarising the option and section 20J dates, and negotiating the terms that actually move — fitout contributions, make-good, rent review mechanisms and the scope of any personal guarantee. For landlords, it means leases that are compliant and enforceable rather than borrowed from another state. Where the lease sits inside a larger structure, our corporate law team can look at how the covenant and the guarantees are arranged, an issue we touch on in our article on structuring a small business.

If you have a lease in front of you, send it to hello@zed.legal before you sign it. Reviewing a lease is inexpensive. Living with a bad one for five years is not.

This article is general information only and current as at September 2026. It is not legal advice and does not take your circumstances into account. Whether the Retail and Commercial Leases Act 1995 (SA) applies to a particular lease depends on its terms and the applicable threshold, and the Act and regulations may change. Please obtain advice on your specific lease before signing or acting.

Signing a Shop Lease in South Australia: What the Act Gives You, and What It Does Not