Alex is Sprintlaw's co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
If you’re about to sign a lease for a shopfront, café, salon, clinic, or any other customer-facing premises in New South Wales, it’s normal to feel a mix of excitement and nerves.
A retail lease can be a huge step forward for your business - but it can also lock you into major costs and obligations for years. That’s why NSW law places special emphasis on transparency before you sign.
In many cases, your landlord must give you a retail lease disclosure statement in NSW so you can understand the deal in clear terms. It’s designed to help you make an informed decision before you commit.
Below, we’ll walk you through what a retail lease disclosure statement in NSW is, when you should get it, what to check carefully, and what to do if something doesn’t add up.
What Is A Retail Lease Disclosure Statement In NSW?
A retail lease disclosure statement is a document a landlord (or their agent) gives you before you enter into a retail lease. It sets out key information about the lease terms and the costs you’re likely to pay.
Think of it as the “headline summary” of the lease - but it’s still a legal document, and what it says (and what it doesn’t say) can matter a lot.
Why Does It Matter?
A lease can be long and technical. The disclosure statement is meant to flag the practical, commercial points upfront, like:
- the rent and how it can increase
- outgoings (like council rates, insurance, centre management fees)
- your permitted use of the premises
- make-good obligations at the end of the lease
- any options to renew
In other words, it’s meant to help you compare options and avoid surprises.
Is Every Lease A “Retail Lease”?
No. The disclosure statement requirements generally apply to retail leases, not all commercial leases.
Whether your premises and lease fall under the retail leasing rules depends on factors like the type of business you’re running and the location (for example, a shop in a retail shopping centre is commonly covered).
Just as importantly, there are some common exclusions. For example, some larger premises (often where the shop has a lettable area of more than 1,000 square metres) may fall outside the NSW retail leasing regime, and certain arrangements like ATMs/vending machines or temporary pop-up arrangements can also be treated differently.
If you’re unsure whether your lease is actually covered, it’s worth getting advice early - the rules and protections can be different. This is where a clear understanding of the Retail Leases Act NSW framework becomes important.
When Should You Receive The Retail Lease Disclosure Statement (And What Else Should Come With It)?
Timing matters. A disclosure statement is only helpful if you receive it early enough to properly review it and negotiate changes before you’re locked in.
In NSW, there are specific timing rules around this: in most retail leasing situations, the landlord must give you the disclosure statement (and a copy of the proposed lease) at least 7 days before you enter into the lease.
In a typical NSW retail leasing process, you may see:
- A draft lease (often negotiated back and forth)
- The retail lease disclosure statement (summarising key terms)
- Any relevant attachments (plans, fit-out guides, centre rules, etc.)
Even if you’re under time pressure (for example, you need to open before a busy season), it’s worth slowing down at this stage. Leases are one of the biggest long-term commitments most small businesses make.
If the landlord gives you the disclosure statement late (or it’s materially incomplete/incorrect), the law can give tenants remedies in some circumstances - including a potential right to terminate within a set period (commonly within the first 6 months) if the disclosure obligations weren’t complied with and you’re disadvantaged. That’s one reason it’s important to treat disclosure as more than just “admin”.
What If The Landlord Says “It’s Standard” Or “Everyone Signs This”?
It may be standard for them - but it still needs to work for your business.
For example, a rent review clause that’s fine for an established franchise may be risky for a new small business still working out cash flow.
If you want support checking whether the documents match what you were promised (and whether they’re commercially reasonable), a Commercial Lease Review can be a practical way to catch issues before you sign.
What Should You Check In A Retail Lease Disclosure Statement NSW?
The disclosure statement is not something to skim. You want to cross-check it against the draft lease, your budget, and the realities of how you operate.
Here are the key areas small businesses should pay close attention to.
1. Rent, Rent Increases, And Review Methods
Start with the rent amount and the payment frequency (weekly/monthly). Then check how rent can increase over time.
Common rent review methods include:
- Fixed increases (e.g. 4% each year)
- CPI increases (linked to inflation)
- Market reviews (rent adjusted to market rates)
Make sure you understand:
- how often rent reviews occur
- who determines “market rent” and how disputes are handled
- whether there are any caps or limits
2. Outgoings (Often The Real Budget-Drain)
Outgoings are costs charged by the landlord to the tenant for operating and maintaining the building or centre.
Depending on your premises, outgoings can include:
- council rates and water rates
- building insurance
- repairs and maintenance of common areas
- security, cleaning, centre management fees
- marketing levies (common in shopping centres)
In your disclosure statement, check:
- which outgoings you must pay (and which the landlord pays)
- whether amounts are estimates or fixed
- how and when outgoings are reconciled
If outgoings aren’t clear and predictable, your “affordable” rent can quickly become a cash flow problem.
3. Permitted Use (Can You Actually Run Your Business?)
The permitted use clause sounds simple, but it can make or break the lease for you.
Make sure the use is broad enough to cover what you do now and what you may expand into later.
For example, a “beauty salon” permitted use might not cover cosmetic tattooing, injectables, retail product sales, or training - even if those are a natural part of your growth plan.
4. Fit-Out, Incentives, And Timing
Many small businesses negotiate incentives like rent-free periods or landlord contributions to fit-out. If you’ve discussed these, they should be accurately reflected in the documentation.
Also check practical timeframes:
- when you can access the premises for fit-out
- when rent starts (especially if you can’t trade immediately)
- any rules about contractors, approvals, and design standards
5. Repairs, Maintenance, And “Make Good”
The end-of-lease “make good” obligation is one of the most common sources of nasty surprises.
Make good may require you to:
- remove your fit-out
- repair damage
- repaint
- restore the premises to a specified condition (sometimes “base building”)
You’ll want to understand the condition you must return the premises in - and factor in the cost.
6. Options To Renew And Notice Requirements
If you’re counting on being in the premises long-term, the option to renew (if any) matters.
Check:
- whether you have an option to renew or the landlord has discretion
- how and when you must exercise the option
- what happens to rent at renewal (fixed/CPI/market)
Notice periods can be strict. Even being a few days late can put you at risk of losing an option. For timing questions, it can help to understand what counts as a business day when notice must be given.
If you’re already in a lease and approaching renewal, it’s also worth planning ahead around lease renewal notice periods in NSW.
Common Red Flags Small Businesses Miss Before Signing
Even when you receive a retail lease disclosure statement, problems can still arise if the lease and the disclosure statement don’t match, or if key risks aren’t obvious until you’re operating day-to-day.
Here are some common red flags we see small business tenants miss.
The Disclosure Statement Doesn’t Match The Lease
If the disclosure statement says one thing but the lease says another, you need to clarify which document governs and whether amendments are required.
Don’t assume it’s a “minor admin error”. In a dispute, the fine detail matters.
Unclear Or Broad Outgoings
Watch for outgoings described in very broad terms without a clear list, estimate, or cap. Ask for a breakdown and query anything that seems unrelated to the premises you occupy.
Restrictions That Affect Trading
Some leases include restrictions that can impact your day-to-day operations, such as:
- limits on signage and shopfront appearance
- rules on trading hours (especially in centres)
- noise, smells, waste disposal requirements
- limitations on deliveries, customer parking, or use of common areas
These can sound manageable until you realise they clash with how your business actually runs.
Personal Guarantees And Security
Many landlords ask for personal guarantees (especially for new businesses). This means you can become personally responsible if the business can’t meet the lease obligations.
You may also be asked for security like:
- a cash bond
- a bank guarantee
This is a negotiation point, and it’s worth understanding the personal risk involved before signing.
What If You Need To Exit, Transfer, Or End The Lease Early?
Ideally, you’ll never need an exit plan - but in reality, business changes happen.
You might outgrow the space, your foot traffic might not meet expectations, or your business model may pivot. That’s why it’s smart to think about “what if we need to leave?” before you sign.
Ending A Lease Early Can Be Costly
Retail leases can include significant consequences for early termination, including:
- paying rent until a new tenant is found
- covering the landlord’s reletting costs
- make good obligations even if you leave early
Understanding your break options (if any) and the legal risk is crucial. This is also why it’s worth being across the practical realities of breaking a commercial lease agreement before you commit.
Assignment (Transferring The Lease)
If you sell your business, you may want to assign the lease to the buyer (so they take over the premises and lease obligations). Assignment usually requires landlord consent and formal documents.
Where a transfer is on the table, it’s common to use a Deed of Assignment of Lease to record the arrangement properly.
Notice And “Vacate” Requirements
Even if your lease ends naturally, you may still need to provide notice and follow certain steps to hand back the premises correctly.
If you’re dealing with a situation where you may need to leave (or your landlord is pushing you to leave), it’s important to understand your position around a notice to vacate a commercial lease in NSW.
In more complex situations (for example, disputes, alleged breaches, or negotiated exits), tailored lease termination advice can help you weigh up your options and reduce the risk of an expensive misstep.
Key Takeaways
- A retail lease disclosure statement in NSW is intended to give you clear, upfront information about key lease terms and costs before you sign.
- In most cases, the landlord must give you the disclosure statement and a copy of the proposed lease at least 7 days before you enter into the lease.
- You should carefully check rent review clauses, outgoings, permitted use, fit-out obligations, make good requirements, and renewal options - and cross-check them against the lease.
- Red flags often include unclear outgoings, restrictive trading conditions, mismatches between documents, and personal guarantee risks.
- Before signing, it’s smart to think through your “exit plan” - including whether you can assign the lease, what it costs to leave early, and what notice you must give.
If you’d like help reviewing a retail lease disclosure statement in NSW or negotiating a lease before you sign, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
