[Updated October 2023]

Evicting a commercial tenant

Introduction

Whether acting for a landlord or tenant, the eviction of commercial tenants is vastly different to the rules governing the eviction of residential tenants. This is because the Courts and VCAT consider commercial tenancies to be long-term binding contracts between commercial parties.

While residential tenancy rules in Victoria allow landlords to evict tenants for little reason or no reason at all (in 120 days), the law treats commercial tenancies very differently. There are more protections in place for commercial tenants to ensure they can build a business from a premises and potentially sell any goodwill attached to a particular location.

The prevailing attitude at VCAT is to give tenants every opportunity to retain possession. Tenants can and do use this to their advantage. Landlords need to follow the rules meticulously to obtain possession.

Termination of commercial tenancies involves knowledge of the principles of contract law, termination and waiver, notices, the Property Law Act (section 146), equitable set-off, exercise of options, and other common law concepts such as taking possession and conversion of goods.

Entitlement to evict

When a tenant takes possession of a property under a lease, that tenant enjoys possession to the exclusion of all others, including the owner of the land: Landale v Menzies (1909) 9 CLR 89 at 111.

The fundamental question for a landlord or proprietor seeking to interfere with the lawful possession of a tenant is 'on what legal and factual basis is the evicting party seeking to remove an occupant from possession'? Proceeding without a clear answer to this question is a risk, whether prosecuting or defending an application.

Any interference with the right to exclusive possession is to be treated with great care. This is particularly so in cases where a tenant is alleged to have breached the terms of a lease and termination and eviction is sought on that basis.

Breach of lease

Whether a particular act or omission constitutes a breach of the lease is a matter of the wording of the lease, whether it is a breach or repudiation of an essential term, and whether or not it gives rise to a right to terminate.

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The full article (2884 words) considers:

Key tests to satisfy before seeking possession
Re-entry methods
Actual re-entry
Notices: mistakes to avoid
Making an unequivocal demand to re-enter
Dealing with wrongful eviction
Self-help
Self-help and actual re-entry: overlapping concepts
Self-help and re-entry by force