Landlord Obligations Under NSW Commercial Leases

If you’re leasing a shop, office, warehouse or other premises in New South Wales, it’s easy to assume the “big ticket” risks sit with you as the tenant. After all, you’re the one paying rent, fitting out the space, and relying on that location to run your business.

But a commercial lease is a two-way legal relationship. Your landlord has obligations too - and understanding those obligations can help you negotiate better terms, avoid disputes, and know what to do if something goes wrong.

In this guide, we’ll break down the main commercial lease landlord obligations in NSW business owners commonly ask about, including repairs, outgoings, disclosure, access, safety issues, and what changes if your lease is a “retail lease”.

Keep in mind landlord obligations can vary depending on what your lease says and what laws apply. This article is general information only and isn’t legal advice. The goal here is to help you spot the main issues early, so you can make confident decisions before you sign (and while you’re leasing).

Is Your Lease A “Retail Lease” In NSW (And Why Does It Matter)?

In NSW, landlord obligations can look very different depending on whether your lease is regulated as a retail lease under the Retail Leases Act 1994 (NSW), or whether it’s a “standard” commercial lease.

This matters because the Retail Leases Act sets extra rules designed to protect many retail tenants. That can include stricter requirements around:

• disclosure documents and timing (including when disclosure must be given before you enter into the lease);
• outgoings (what can be recovered and how they must be estimated and reconciled);
• how rent reviews can be structured (including restrictions on some methods in certain circumstances);
• process and conduct rules that can apply to negotiations and leasing conduct (including statutory protections against misleading or unconscionable conduct).

Retail leases often include premises like shops in a shopping centre, strip retail, and many “customer-facing” businesses. But it’s not just about what you sell - it can also depend on the premises type and the permitted use stated in the lease.

If you’re not sure whether your arrangement is a retail lease, it’s worth getting it checked early, because the “retail lease rules” can apply even if the document is called a “commercial lease”.

If you’re reviewing a lease and want clarity on what regime applies, a Commercial Lease Review is usually the fastest way to identify where the legal risk sits for your particular premises and industry.

What Are The Key Commercial Lease Landlord Obligations In NSW?

When people search for commercial lease landlord obligations in NSW, they’re often trying to answer practical questions like:

• Who pays for repairs?
• Can the landlord charge me for these outgoings?
• What happens if something breaks or becomes unsafe?
• Can the landlord enter whenever they want?
• Do they have to disclose anything before I sign?

There isn’t one universal checklist that applies to every lease, because the lease terms heavily shape the relationship. That said, there are common obligation “buckets” that come up again and again.

Below are the key areas you should understand.

1) Providing “Quiet Enjoyment” (Not Interfering With Your Use)

Most commercial leases include an obligation (express or implied) that you can occupy the premises without unreasonable interference by the landlord. This is often described as quiet enjoyment.

In practical terms, it means your landlord generally shouldn’t do things that stop you from properly using the premises for your permitted business activities - for example, blocking access for extended periods without justification, repeatedly turning off essential services, or constantly entering without notice.

This doesn’t mean the landlord can’t access the premises at all. It usually means they must act reasonably and in accordance with the lease, including giving notice where required.

2) Repairs And Maintenance (What The Landlord Must Fix)

Repairs are one of the biggest friction points in any commercial tenancy.

A common misconception is that landlords must “fix everything”. In commercial leasing, tenants are often responsible for a lot of day-to-day maintenance - and sometimes even significant repair obligations - if the lease is drafted that way.

However, it’s also common for landlords to remain responsible for things like:

• structural components (e.g. foundations, load-bearing walls);
• the roof, gutters, and external walls;
• base building services (depending on drafting);
• common areas (if applicable).

In retail leases, you still need to look closely at the drafting. The Retail Leases Act can limit certain recoveries (for example, some “capital” type costs and some categories of outgoings), but it doesn’t automatically mean the landlord must repair everything. The allocation of repair responsibility is still largely driven by the lease terms, with the Act overlaying specific rules in certain areas.

Practical tip: Don’t rely on assumptions. Check how your lease defines terms like “premises”, “building”, “common areas”, and “services”, and exactly what your repair clause says. If your lease says you must “keep the premises in good repair”, that can be broader than it sounds.

3) Essential Services, Safety Issues, And Urgent Repairs

If something impacts health, safety, or the basic usability of the premises (for example, electrical faults, serious water leaks, dangerous access ways, or significant mould), it can become urgent quickly.

Your rights and your landlord’s obligations will depend on:

• the lease (including any “make good” and repair provisions);
• workplace health and safety duties that apply to the premises and your business operations;
• any building compliance requirements relevant to the property.

If you’re operating a premises that customers attend (like retail, hospitality, allied health, or services), it’s not just a “property issue” - you may have your own obligations to manage risk and keep people safe.

If a serious issue arises, it’s usually best to document it immediately (photos, emails, timelines), notify the landlord in writing, and check whether your lease allows you to organise urgent works and recover costs. Many leases have very specific notice and recovery procedures.

4) Disclosure Obligations (Especially For Retail Leases)

Disclosure is a major part of retail leasing in NSW. For many retail leases, the landlord must give you a disclosure statement (and other prescribed information) before you enter into the lease.

Importantly, retail lease disclosure is time-sensitive. As a general rule, landlords must give the disclosure statement at least 7 days before the lease is entered into (subject to some exceptions, such as where a tenant gives a valid written waiver for an urgent lease).

While the exact disclosure requirements can vary, the key idea is that you should know upfront things like:

• the rent and rent review method;
• estimated outgoings and what they cover;
• any fit-out or works obligations;
• important rules that affect how you trade (e.g. centre rules in a shopping centre).

If you don’t receive proper disclosure where it’s required, that can sometimes give a tenant specific rights or remedies under the Retail Leases Act (depending on the circumstances and what information was missing). It can also be a red flag that the lease needs a careful review before you commit.

Outgoings, Rent Reviews, And Other Costs: What Can A Landlord Charge You?

Cost transparency is one of the most important parts of leasing for small businesses. Two leases with the same “rent” can have very different total costs once you factor in outgoings, management fees, utilities, and compliance costs.

Outgoings: The Big One

Outgoings generally refer to expenses the landlord passes on to the tenant. Common examples include:

• council rates and water rates;
• building insurance (sometimes);
• common area cleaning, lighting and security (for multi-tenant sites);
• repairs/maintenance of common facilities.

Whether your landlord can charge you outgoings (and which ones) depends heavily on the lease and, for retail leases, the rules in the Retail Leases Act.

For example, in NSW retail leases there are specific rules about how outgoings must be disclosed and recovered. The landlord generally must provide an estimate of outgoings, and there are reconciliation/accounting requirements (including providing an annual statement and, for larger outgoings, audit requirements). There are also limits on recovering certain categories of costs, and the landlord generally cannot recover land tax from a retail tenant.

Practical tip: Always ask for an outgoings estimate and check whether the lease allows the landlord to increase outgoings during the term, and how those increases are calculated. If you’re budgeting tightly, you want as much certainty as possible.

Rent Reviews: The “Hidden” Long-Term Cost

Rent review clauses set out how rent changes over time. Common rent review methods include:

• CPI increases (tied to inflation);
• fixed percentage increases (e.g. 4% each year);
• market reviews (rent adjusts to market value at set dates);
• turnover rent (more common in retail/shopping centres, based on revenue).

Landlords typically need to apply rent reviews in accordance with the lease. Whether they must provide supporting information depends on the drafting and the type of lease. For retail leases, the Act can regulate certain rent review arrangements and provides a process for how market rent is determined if the parties can’t agree (including referral to a specialist valuer in accordance with the Act’s procedure).

Insurance: Who Insures What?

Insurance obligations are often split between:

• landlord insurance (often building insurance, sometimes public liability for common areas); and
• tenant insurance (often public liability for your operations, contents/stock, workers compensation if you have staff, and sometimes glass).

Leases often require the landlord to insure the building and provide evidence on request, and require the tenant to maintain specific cover and provide certificates of currency.

Because insurance wording can have real financial consequences if something goes wrong, it’s worth checking exactly what the lease requires (and whether it matches what your insurer will actually cover).

Access, Entry And Works: When Can A Landlord Come In Or Do Building Works?

Another common area of confusion is when a landlord can access the premises or do works that affect your trading.

Landlord Entry Rights (And Notice Requirements)

Most leases allow landlords to enter the premises for specific reasons, such as:

• inspections;
• repairs and maintenance;
• compliance checks;
• showing the premises to prospective buyers or future tenants (often later in the term).

Usually, the landlord must give you notice (except in emergencies). The amount of notice and permitted times are typically set out in the lease.

What you should check:

• How much notice is required?
• Can entry occur during your trading hours?
• Are there limits on frequency?
• Does the landlord need to be accompanied?

If entry is excessive or not compliant with the lease, it may breach your right to quiet enjoyment.

Building Works And Disruption To Trade

Sometimes landlords need to do renovations, upgrades, or structural works. Your lease may contain clauses that allow works even if they cause disruption - and may limit your ability to claim compensation.

From a practical standpoint, it’s important to understand:

• whether the landlord must minimise disruption;
• whether they must give notice before works begin;
• whether you can claim rent abatement (temporary rent reduction) if you can’t trade normally (if your lease provides for it, or if a specific legal remedy applies);
• how long works can continue before you have additional rights.

If you’re negotiating a new lease and you’re worried about disruption (especially in high-foot-traffic areas), it may be worth discussing a tailored clause.

Repairs, Damage And “Make Good”: How Obligations Can Shift Over Time

A big reason disputes happen at the end of a lease is that repair obligations and “make good” obligations often get blurred together.

Fair Wear And Tear Vs Tenant Damage

Many leases distinguish between:

• fair wear and tear (normal deterioration from ordinary use); and
• damage (something broken or deteriorated due to misuse, negligence, or failure to maintain).

Landlords generally can’t expect a premises to stay “brand new” forever. But if your business operations cause unusual wear, or if you’ve modified the premises, you can end up with repair liability.

Make Good Obligations At The End Of The Lease

“Make good” is the process of restoring the premises at the end of the lease, often by removing fit-out, signage, partitions, and returning the space to an agreed condition.

Make good obligations can be expensive, and they often become a negotiation point when you’re deciding whether to renew the lease, exit early, or assign it to another business.

Your landlord’s obligations here are usually about acting consistently with the lease terms - for example, being clear about what standard they expect and not requiring more than what the lease allows.

Practical tip: Before you sign, try to ensure the lease is clear on what you must return the premises to (for example, “base building condition” or “as at commencement, excluding fair wear and tear”). Vague make good clauses are where costs blow out.

What If The Landlord Breaches Their Obligations?

If you think your landlord isn’t meeting their obligations, it can be tempting to “push back” by withholding rent or taking matters into your own hands. In most cases, that’s risky.

A safer approach is to step through the problem methodically.

1) Check The Lease First

Start with the lease clauses on:

• repairs and maintenance;
• services and utilities;
• entry and access;
• dispute resolution;
• default and remedies.

Commercial leases often have formal notice requirements (for example, notice in writing to a specific address, with a certain timeframe for the landlord to remedy the issue).

2) Put It In Writing (And Keep Good Records)

If something is wrong, notify the landlord or property manager in writing. Include:

• what the issue is;
• when you noticed it;
• photos or evidence (if relevant);
• why it affects your business (e.g. safety risk, inability to trade);
• what you want done and by when.

This creates a clear paper trail if you need to escalate later.

3) Be Careful With Rent Withholding

Withholding rent without a clear legal basis can put you in breach, even if the landlord has done something wrong. Some leases allow set-off in limited circumstances, but many don’t.

If the issue is serious (for example, you can’t trade), it may be possible to negotiate a rent abatement arrangement or rely on specific lease rights - but you should get advice before taking steps that could trigger default.

4) Consider Your Practical Options: Negotiate, Mediate, Or Exit

Depending on the situation, you might explore:

• negotiating a solution (for example, works completed by a certain date with a rent reduction);
• formal dispute resolution procedures in the lease or under retail leasing processes (if applicable);
• assignment or subleasing if you need to move locations (subject to landlord consent and lease terms);
• termination in limited cases, if the breach is serious and your lease/law supports it.

If you’re planning to restructure your occupancy (like assigning the lease to a buyer of your business), you may need a Deed of Assignment of Lease to ensure the legal transfer is documented properly.

5) Get The Lease Reviewed Before You Escalate

Often, the “right move” depends on one or two clauses hidden in the lease - for example, a landlord’s obligation to maintain a particular service, or a tenant’s obligation to keep operating even during works.

A quick legal review can clarify what leverage you actually have and help you avoid accidentally breaching the lease while trying to enforce your rights.

Key Takeaways

• Understanding commercial lease landlord obligations in NSW starts with identifying whether your lease is regulated under the Retail Leases Act 1994 (NSW), because retail leases often come with additional disclosure and cost-recovery rules.
• Landlord obligations commonly involve quiet enjoyment, complying with lawful entry requirements, meeting repair responsibilities allocated to them under the lease (often structural or base building items), and following the agreed processes for costs like outgoings and rent reviews.
• Repairs and make good obligations are heavily driven by the wording of your lease, so it’s important to confirm who pays for what before you sign (and before you fit out).
• If a landlord isn’t meeting their obligations, it’s usually best to follow the notice and dispute procedures in the lease and keep everything in writing, rather than withholding rent without advice.
• A lease review can help you spot unfair clauses, clarify risk allocation, and negotiate practical protections like clearer repair obligations or better cost certainty around outgoings.

If you’d like help reviewing or negotiating your commercial lease in NSW, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.