Reading time: 3 minutes

If you are a small business owner, it is more than likely you will deal with a commercial lease at some point during the life of your business. Entering into a lease is a major commitment and you need to make sure you are fully aware of and understand your rights and obligations on entering into the lease. Different rights and obligations attach to retail and non-retail commercial leases in NSW and it’s important to know the difference.

A commercial lease is a document that sets out the rights and obligations of the owner of a commercial property (called the landlord or lessor) and another party that has agreed to occupy the property (the tenant or lessee).

Retail commercial leases

A retail commercial lease is a type of commercial lease. In NSW, retail leases are governed by the Retail Leases Act 1994 (NSW) (the Act). For the Act to apply to business premises, the business must either be:

  •   Included in the list of businesses specified in schedule 1; or
  •   Conducted in premises located in a retail shopping centre

The list of businesses included in schedule 1 is extensive, from bakeries and cookie shops to card shops and barbers.

Under section 6 of the Act, the Act does not apply to leases:

  •   That have a term of greater than 25 years (the term of the lease is taken to include any term for which the lease may be extended or renewed at the option of the lessee);
  •   Leases entered into before the commencement of the section;
  •   Leases entered into under an option granted before the commencement of the section; or
  •   Any other lease prescribed by the regulations as exempt from the Act.

Greater rights for tenants under the Act

The Act creates an additional layer of regulation protecting the tenant in the landlord-tenant relationship. For example:

  • The landlord must provide the tenant with a ‘lessor’s disclosure statement’ which sets out estimates such as the outgoings payable, at least seven days before the retail shop lease is entered into (section 11)
  • The landlord must provide the tenant with a copy of the proposed form of lease at the negotiation stage (in a non-retail commercial lease, a landlord would not normally provide a draft lease until negotiations have been formalised) (section 9)
  • The landlord is responsible for preparing the lease and the cost of preparation cannot be passed on to the tenant (in a non-retail commercial lease, the landlord can seek contribution from the tenant) (section 14)
  • The Act imposes obligations on the landlord with respect to the security deposit – such as lodging it with the Director-General (section 16C)


The Retail Leases Act 1994 (NSW) provides greater protection to tenants in imposing greater regulations on landlords. When entering into a commercial lease, it’s important to understand whether the Act applies, as this means that the landlord must provide, for example, a lessor’s disclosure statement and cannot pass on the cost of preparing the lease to the tenant.


Redundancies and Restructuring: Understanding Your Employer Obligations

Thursday 7 July | 11:00 - 11:45am

If you plan on making a role redundant, it is crucial that you understand your employer obligations. Our free webinar will explain.
Register Now

How to Sponsor Foreign Workers For Your Tech Business

Wednesday 13 July | 11:00 - 11:45am

Need web3 talent for your tech business? Consider sponsoring workers from overseas. Join our free webinar to learn more.
Register Now

Advertising 101: Social Media, Influencers and the Law

Thursday 21 July | 11:00 - 11:45am

Learn how to promote your business on social media without breaking the law. Register for our free webinar today.
Register Now

Structuring for Certainty in Uncertain Times

Tuesday 26 July | 12:00 - 12:45pm

Learn how to structure to weather storm and ensure you can take advantage of the “green shoots” opportunities arising on the other side of a recession.
Register Now

Playing for the Prize: How to Run Trade Promotions

Thursday 28 July | 11:00 - 11:45am

Running a promotion with a prize? Your business has specific trade promotion obligations. Join our free webinar to learn more.
Register Now

Web3 Essentials: Understanding SAFT Agreements

Tuesday 2 August | 11:00 - 11:45am

Learn how SAFT Agreements can help your Web3 business when raising capital. Register today for our free webinar.
Register Now

Understanding Your Annual Franchise Update Obligations

Wednesday 3 August | 11:00 - 11:45am

Franchisors must meet annual reporting obligations each October. Understand your legal requirements by registering for our free webinar today.
Register Now

Legal Essentials for Product Manufacturers

Thursday 11 August | 11:00 - 11:45am

As a product manufacturer, do you know your legal obligations if there is a product recall? Join our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards