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.
You can speak to someone in person by calling us on 13 VSBC (13 8722) or emailing us.