A Guide To The Retail Leases Act In NSW (2025 Updated)

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A lot of brick and mortar stores continue to rent the premises from which they operate in 2025. Rental agreements for businesses differ from other types of leases, as the scope and requirements are usually very different – reflecting both evolving market trends and updated regulatory standards.

Like most other business activities, retail leases are governed by legislation in Australia, and while many principles remain consistent, updates over recent years mean it’s more important than ever to stay informed. Legislation and guidelines frequently differ between states, and keeping up-to-date ensures both tenants and landlords are protected.

Staying abreast of these changes is crucial. For instance, in 2025 many businesses are leveraging online tools for contract management while still adhering to traditional documentation requirements – a trend we explore in our guide on how to sign a contract. This awareness can help you navigate the complexities of modern leasing arrangements with confidence.

What Is A Retail Lease?

A retail lease is essentially similar to a commercial lease, albeit with nuances specific to businesses engaged in the sale of goods. In simple terms, a retail lease applies exclusively to those premises used primarily for retail activities, in contrast to spaces used for offices or warehousing.

Because of these distinct purposes, retail leases are subject to different regulations and requirements compared to other commercial leases.

Stores selling clothing, furniture, groceries, homeware and similar items are typically covered by a Retail Lease Agreement that outlines the specific rights, obligations and operational guidelines for both parties.

Retail Leases Act NSW

The Retail Leases Act 1994 remains the key piece of state legislation governing retail leases in NSW – now updated to reflect current market conditions in 2025. It covers crucial matters including rent, outgoings, assignment, and the respective rights and duties of landlords and tenants. Whether you’re a tenant or a landlord, a clear understanding of this Act is essential to avoid disputes and ensure compliance.

If you need help ensuring your retail lease complies with current legislation, our lawyers can assist you with our comprehensive Retail Lease package as well as our contract review and redrafting service.

I’m A Tenant – What Do I Need To Do?

As a tenant, there are several important factors that determine your rights and responsibilities under the current legislation. Familiarising yourself with these requirements can help you avoid costly disputes and ensure your lease terms are fair and transparent.

We’ll cover these in detail below.

Retail Lease Disclosure Statement

Schedule 2 of the Retail Leases Act mandates that a disclosure statement be provided by the landlord at least 7 days before the lease commences. This statement must detail the key elements agreed upon by both parties – offering clarity on terms such as rent reviews, outgoings and termination procedures.

If a landlord fails to provide this disclosure statement, the tenant may have grounds to terminate the lease.

Once the landlord provides the disclosure statement, the tenant then has 7 days to return their own version. Both statements must be signed by the parties to confirm mutual understanding. You can view a sample disclosure statement here.

Retail Lease Bonds And Deposits

Under the Act, a tenant is typically required to provide a bond or deposit payment, which is generally equivalent to about 3 months’ rent. It is essential that this payment is made on time to avoid any disputes.

Pursuant to section 16C of the Act, the landlord must lodge the deposit with the Director General of the Department of State and Regional Development within 20 days of receiving it. Should you have any concerns about bond management or timing, our contract review service can provide clarity on your rights.

Permitted Use

Permitted use outlines the ways in which the leased premises can be utilised. This might include limits on certain activities, operational hours, or noise levels. As a tenant, it’s vital to ensure that the permitted uses are clearly negotiated and documented in your lease agreement.

For further understanding of permitted use in commercial settings, check out our article on permitted use in commercial leases.

I’m A Landlord – What Do I Need To Do?

As a landlord, there are several key responsibilities to uphold when leasing your property. Ensuring that your retail lease agreement is robust, clear, and compliant with the latest legislative updates is paramount.

Let’s go through these obligations below.

Get A Retail Lease Agreement

It is incredibly important to have a bespoke Retail Lease Agreement in place with your tenants. This agreement not only protects your interests and property but also helps foster a smooth and professional relationship with your tenants by clearly documenting all terms, from lease duration to rent reviews.

If you’re in need of assistance drafting or reviewing your lease documentation, our team at Sprintlaw offers tailored services including contract review and redrafting to ensure your lease meets 2025 standards.

Rent Abatement

Rent abatement isn’t a compulsory term, but it may be an attractive option for both landlords and tenants. Under rent abatement, a landlord may offer reduced rent or even a rent-free period as an incentive for a longer lease commitment by the tenant.

If you and your tenant agree to rent abatement terms, ensure these are clearly drafted into your Retail Lease Agreement to avoid any ambiguity later on.

Retail Lease In Other States

It’s important to remember that the Retail Leases Act applies solely to NSW, meaning that similar but varied legislation governs retail leases in other states. If you operate outside NSW, always refer to your local legislation.

For instance, residents of Victoria should be well acquainted with the Retail Leases Act 2003, which covers key issues such as premises fit outs, rent reviews, and tenant relocation. Similarly, Queensland’s Retail Shop Lease Act 1994 and Western Australia’s Commercial Tenancy (Retail Shops) Agreements Act 1985 provide specific guidelines.

For further insights on securing your business legally across different states, our article on business structure and legal requirements can be useful.

Can I Assign My Retail Lease?

Yes, retail leases can be assigned to another party; however, the tenant must first obtain explicit permission from the landlord. Once a request to assign the lease is made, the landlord is obliged to provide a response within 28 days.

Get A Deed Of Assignment Of Lease

If you intend to assign your retail lease, it is crucial to document the assignment in writing. A Deed Of Assignment Of Lease ensures that your rights and obligations are clearly transferred to the new party. We recommend consulting with an experienced legal professional to guide you through this process.

Can I Extend My Retail Lease?

Extending your retail lease will depend on mutual agreement between the landlord and tenant. If both parties consent to an extension, the termination date of the lease is brought forward accordingly – for example, a lease originally set to end on a certain date might be extended by an additional six months.

When considering an extension, ensure the new terms are clearly incorporated into the existing agreement. For added assurance, you might want our experts to review your revised lease, or even draft a new one if necessary.

Can I Renew My Retail Lease?

Renewal of a retail lease is also subject to the agreement of both the tenant and the landlord. In a renewal scenario, a completely new contract is often drawn up with a different termination date, even though the terms may closely resemble the previous agreement.

Renewals are an opportunity to renegotiate terms if needed, and as always, the landlord is required to provide a disclosure statement at least 7 days before the new lease commences.

What If I Don’t Have A Lease Agreement?

Without a written lease agreement, it can be very challenging to enforce your rights or clarify responsibilities in a commercial setting. Verbal agreements typically lack the certainty and evidential support of a written contract, making disputes harder to resolve.

For your peace of mind, it is always advisable to have a formal, written agreement drawn up by a legal professional. Our Retail Lease Agreement service is designed to ensure that every essential detail is covered.

Where Can I Get A Retail Lease Agreement?

It is important to have a lease agreement specifically tailored to retail premises – commercial leases for business premises are significantly different from residential ones. Your agreement needs to address the unique aspects of retail operations, from management and lease duration to termination, deposit requirements, and any special conditions like rent abatement.

At Sprintlaw, our team of experienced lawyers can draft a Retail Lease Agreement that is fully customised to your business’ requirements. We also recommend a comprehensive legal health check of your contractual documents to ensure they remain robust and compliant in 2025.

Emerging Trends in Retail Leasing for 2025

In today’s evolving retail landscape, both landlords and tenants are embracing digital solutions and more flexible leasing models. Many are now opting for online lease management systems that streamline payments, maintenance requests, and even negotiations. This technological shift is fostering faster response times and clearer communication between parties.

Furthermore, the rise of omni-channel retailing has led to hybrid lease models that accommodate both physical and digital operations. For more insights on digital contracting and modern lease management, take a look at our digital leasing solutions.

Key Takeaways

Whether you are a tenant or a landlord, understanding how the Retail Leases Act applies to you is vital. To summarise what we’ve discussed:

A retail lease is a specialised agreement for businesses engaged in the sale of goods.
The Retail Leases Act remains the primary legislation governing retail leases in NSW, now updated with current provisions for 2025.
Both tenants and landlords must exchange and sign disclosure statements – with the landlord responsible for issuing the first statement.
Tenants should be mindful of their bond/deposit obligations and any permitted use requirements outlined in the lease.
Landlords must ensure a tailored retail lease agreement is in place, including any agreed rent abatement terms.
While the Retail Leases Act applies in NSW, other states have their own legislation governing retail leases.
Leases can be assigned with the landlord’s permission – it’s advisable to secure a clear Deed of Assignment.
Retail leases can be extended or renewed, providing opportunities to renegotiate terms to suit evolving needs.
Emerging digital and hybrid leasing trends are transforming traditional retail lease arrangements in 2025.

If you would like a consultation on the Retail Leases Act or need assistance with your retail lease documentation, feel free to reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

Sapna Goundan

Sapna has completed a Bachelor of Arts/Laws. Since graduating, she's worked primarily in the field of legal research and writing, and she now writes for Sprintlaw.

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