Changes to the Retail Leases Act

A significant number of changes were made to the Retail Leases Act this year. REINSW recently held a webinar with Michael Miller and Nicola Gorton from the Office of the NSW Small Business Commissioner to discuss the changes to the act. Watch it in full here.

The changes began on 1 July 2017, and create new obligations and seek to reduce compliance costs.

What is a retail lease?

The Retail Leases Act governs the relationship between landlords and tenants of retail shops in NSW.  Businesses, which are subject to the act, are listed in Schedule 1. It also applies to any business located in a shopping centre, which is defined as five or more retail shops, one owner or strata plan and known as a centre, arcade, plaza or shopping court. However, there are also exemptions from the act, including:

  • Shops of more than 1000 square metres;
  • Leases of less than six months;
  • Leases of longer than 25 years;
  • Certain uses such as signage, ATMs, rides.

What are some of the key changes to the act?

  • Full disclosure of outgoings necessary;
  • Minimum five-year term removed;
  • Registration of leases for more than three years;
  • Return of bank guarantees within two months;
  • Demolition provisions clarified;
  • Copy of signed lease given within three months;
  • Online sales not involving the shop cannot be required to be disclosed;
  • Assignment streamlined;
  • Mortgagee consent fees can’t be passed to tenant;
  • NSWCivil and Administrative Tribunal (NCAT) jurisdiction up to $750,000;
  • Review to current market – valuersnow appointed by the Office of the Small Business Commissioner instead of NCAT.

To find out more information about these, watch the webinar here.

What must owners give the tenant?

When the shop is advertised:

  • Copy of a proposed lease

Before the Lease is signed:

  • The Retail Tenant’s Guide
  • The Disclosure Statement (at least seven days before lease starts).

The lease starts when the tenant takes possession, starts to pay rent or signs.

What do owners need to provide to the tenant?


Estimates of annual outgoings

  • Audited outgoings statement (or copy of bills)
  • Marketing plan if promotion levy collected
  • Marketing statement.

Six months before the end of the lease:

  • Write to say if tenant will be offered a new lease or not
  • Make good requirements.

Courtesy of: