Five-year waiver certificates
Many leases are signed for a period of five years, with further options to renew. Others are signed for shorter terms, also with further options to renew.
Tenants have the right to a five-year term but are able to waive this right and sign a lease for a shorter time period. Tenants whose lease terms add up to at least five years do not need to apply for a waiver certificate. A three-year lease with an option of a further two-year term, for example, will not require a waiver certificate.
To waive the right to a five-year term, tenants must apply to the Victorian Small Business Commission (VSBC) for a five-year waiver certificate.
To apply please complete the five-year waiver certificate online application form below.
Reasons to apply for a five-year waiver certificate
The most common reason why a tenant will apply for a five-year waiver certificate is because they are starting a new business.
The tenant may be unsure about:
- the long-term suitability of the premises
- whether their business will succeed
- if their business will outgrow the premises over the term of the lease
In these cases, tenants may seek a lease term of less than five years; for example, a two-year lease. In other cases, the landlord may not be able to offer a five-year lease; for example, if the building is to be demolished or redeveloped. The landlord may therefore request the tenant seeks a five-year waiver certificate before commencing negotiations.
The Victorian Civil and Administrative Tribunal (VCAT) has handed down the following decisions about overholding and entitlement to a five-year term:
- Daco Enterprises Pty Ltd v The Golden Sultana Pty Ltd  VCAT 2457 (19 December 2006)
- Awad v Conell (VCAT)  VCAT 2402 (11 November 2009) (link here)
Other decisions can be found on the Australian Legal Information Institute (AustLII) website.
Applying for a certificate
Please use the below form to apply to the VSBC for a five-year waiver certificate. After completing the form, the certificate will be automatically issued and sent to the tenant’s email address.