Gavin McInnes

If you lease or own retail premises in Western Australia within a strata complex (for example, a small shop in a strata shopping centre or mixed-use building), the question of who pays the strata levies can be surprisingly complex.

Landlords naturally want to pass on as much as possible as “outgoings”. Tenants are rightly concerned not to pay more than the law allows. The problem is that strata law and WA retail leasing law use different concepts – and they don’t line up neatly.

This article explains, in practical terms:

• When strata levies can be recovered from a retail tenant;

• The difference between the Administration Fund and Reserve (Sinking) Fund; and

• Which parts of those levies must remain a landlord’s cost under WA’s Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (the CT Act).

When a retail lease is signed, the landlord must disclose the first-year outgoings—what categories are recoverable, how they’re calculated and apportioned, and when they’re payable. That opening disclosure is not a promise that the dollar amount stays the same for the entire term. Costs move—council rates, water/sewerage, body corporate administration levies, shared services, etc.—and the RSLA is designed to handle that movement on a period-by-period basis.

From the second year onward, the regime resets each financial year via two documents:

• an annual outgoings estimate (provided at least a month before the period starts), and

• an audited annual statement (provided after the period ends).

If either document arrives late, the tenant can withhold outgoings until it’s provided. That is a timing right, not a permanent waiver.

Key principle: The Act fixes the types and method of recovery, but not a term-wide dollar cap.

• NSW: Since 1 Jan 2023, gyms/fitness studios (including yoga, barre, pilates and dance) are expressly listed as retail shops under the Retail Leases Regulation 2022 (NSW). NSW retail leasing rules apply.

• QLD: Not automatically retail. In Queensland, fitness uses are not on the prescribed “retail” list. A gym/yoga/pilates lease in QLD is only a retail shop lease if it sits inside a “retail shopping centre” (location test) and no exclusion applies (e.g., large floor plate over 1,000 m², etc.).

• Stand-alone QLD sites (like many Toowoomba sheds/warehouses converted to gyms) are usually commercial / non-retail, so landlords can pass through the full suite of outgoings if the lease says so (including land tax and management fees, which are typically restricted under the retail regime).