Insight
Retail Leases Act NSW
18 September 2026
In short
The Retail Leases Act 1994 (NSW) overrides parts of a retail lease to protect tenants. Key protections are a prescribed disclosure statement before signing, a five-year minimum term unless waived by certificate, limits on recoverable outgoings and rent review methods, restrictions on lease preparation costs, and compulsory mediation through the NSW Small Business Commissioner before NCAT.
What the Act covers
The Act applies to leases of "retail shop" premises — those located in a retail shopping centre, or used wholly or predominantly for a business listed in Schedule 1 (cafés, hairdressers, gyms in some configurations, clothing, food, services retail and many others). Very large premises and certain arrangements are excluded. Because coverage turns on the premises and permitted use, some tenants are protected without realising it, and some landlords issue leases that ignore provisions they cannot contract out of.
Anything in the lease inconsistent with the Act is generally void to that extent. You cannot draft around it.
The protections that matter commercially
- Disclosure statement. Required at least seven days before entry into the lease. Failure, or material error, can give the tenant a right to terminate in the first six months and to claim compensation for loss.
- Minimum five-year term. Including options, unless a lawyer's or conveyancer's certificate is provided. Short-term deals are routinely signed without the certificate.
- Outgoings. Only recoverable if disclosed, with annual estimates and audited statements required. Land tax recovery is restricted and capital expenditure cannot be recovered as an outgoing.
- Rent reviews. The review method must be specified, ratchet clauses preventing a market review falling are prohibited, and market review procedures including valuer appointment are regulated.
- Lease preparation costs. The landlord generally cannot pass its own lease preparation costs to the tenant.
- Assignment. Consent cannot be unreasonably withheld and the Act prescribes the process, including the information the tenant must provide.
- Relocation, demolition and centre changes. Minimum notice and compensation obligations apply.
- Make good and end of term. The tenant's obligation is read against the disclosure statement and the lease — often narrower than the landlord's demand at handover.
For tenants: what to do before you sign
- Get the disclosure statement and compare it line by line with the lease. Differences are leverage.
- Model the total occupancy cost: base rent, outgoings, promotion levy, fit-out, bank guarantee and personal guarantees.
- Check the permitted use is wide enough for how the business will evolve, and whether exclusivity applies.
- Understand option exercise dates. Missing one by a week can cost the business its premises.
- Know the make-good position before fit-out, not at the end.
For landlords: where claims come from
Almost all tenant claims trace to three things: a disclosure statement that was late, incomplete or inconsistent with the lease; outgoings recovered that were never properly disclosed; and a rent review conducted outside the prescribed process. Each is avoidable at the documentation stage and expensive to fix at NCAT.
When to involve a lawyer
- You have been handed a lease and disclosure statement to sign.
- You are being asked to accept a term shorter than five years.
- Outgoings, a promotion levy or land tax are being charged and you doubt they were disclosed.
- A market rent review, assignment, relocation or make-good demand is on foot.
- You are buying a business where the lease is the real asset — see due diligence when buying a business.
Frequently asked questions
Does the Retail Leases Act apply to my lease?
Generally it applies to leases of retail shop premises in NSW — those in a retail shopping centre, or used wholly or predominantly for one of the business types listed in Schedule 1 of the Act. Premises above a certain lettable area, and some specific tenancy types, fall outside it. Whether your lease is covered is a question of the premises and the permitted use, not what the lease calls itself.
What is a disclosure statement?
A prescribed document the landlord must give the tenant at least seven days before the lease is entered into, setting out rent, term, outgoings, fit-out, permitted use and centre information. If it is not given, or is incomplete or materially misleading, the tenant may have a right to terminate within the first six months and to compensation.
Is there a minimum lease term?
Yes. The Act provides for a minimum term of five years, including options, unless the tenant obtains a certificate from a lawyer or licensed conveyancer confirming that the effect of that provision has been explained and the tenant agrees to a shorter term.
Can the landlord charge whatever outgoings it likes?
No. Outgoings must be disclosed and are only recoverable to the extent they were disclosed. Land tax recovery is restricted, the landlord must provide annual estimates and audited statements, and capital works and certain centre costs cannot be passed through as outgoings.
Where are retail lease disputes heard in NSW?
Retail tenancy disputes generally go to mediation through the NSW Small Business Commissioner first, and then to NCAT. Mediation is a precondition in most cases, which keeps costs well below court litigation — one reason it pays to raise an issue early rather than let arrears or a make-good dispute build.
Two ways to start
Get a fixed fee before any work starts.
Answer a few short questions, attach your documents if you have them, and a senior lawyer replies with the scope and the price.
Know what you need? Request a fixed-fee quote and upload your documents. Not sure of scope? Book a short call with a senior lawyer instead.
Have the lease reviewed before you commit
Send us the lease and disclosure statement and we'll review both for a fee agreed upfront.
Know what you need? Request a fixed-fee quote and upload your documents. Not sure of scope? Book a short call with a senior lawyer instead.