Reform­ing Retail Leas­es? Retail Leas­es Amend­ment (Review) Bill 2025 (NSW)

What does the Retail Leas­es Amend­ment (Review) Bill 2025 mean for land­lords and ten­ants in NSW?

On 14 Octo­ber 2025, the Min­is­ter for Small Busi­ness intro­duced the Retail Leas­es Amend­ment (Review) Bill 2025 (Bill) to NSW Par­lia­ment to imple­ment the first tranche of leg­isla­tive reforms to the Retail Leas­es Act 1994 (Act) pro­posed by the NSW Small Busi­ness Com­mis­sion (Com­mis­sion). 

We inves­ti­gate the Bill and assess whether real reform of the Act is pro­posed and how these changes, will affect Land­lords and Ten­ants, if at all.

What is changing?

The Min­is­ter in her sec­ond read­ing speech for the Bill stat­ed the reforms pro­posed by the Bill ​“are prac­ti­cal, bal­anced and respon­sive to the needs of the retail leas­ing sec­tor. They will fos­ter greater con­fi­dence in the retail leas­ing sys­tem from both land­lord and ten­ants by improv­ing clar­i­ty, stream­lin­ing process­es and strength­en­ing key safeguards.”

Let’s exam­ine whether this is the case.

Pre-lease doc­u­men­ta­tion

The Act cur­rent­ly pro­hibits a Land­lord (or a per­son act­ing on behalf of a Land­lord) to offer to enter into a lease of a shop, invite an offer to enter into a lease of a shop or adver­tise that a shop is for lease unless the Land­lord makes avail­able to any prospec­tive Ten­ant a copy of the pro­posed lease and a copy of the retail ten­an­cy guide pre­scribed by the regulations.

The Bill seeks amend the pre-lease doc­u­men­ta­tion required to a copy of the lease and ​“a copy of each doc­u­ment pre­scribed by the reg­u­la­tions”. Of course, there is not yet any con­fir­ma­tion or pro­pos­al as to what doc­u­ments will be list­ed with­in the reg­u­la­tions. We do note how­ev­er, that the Com­mis­sion has rec­om­mend­ed the pro­vi­sion of both the cur­rent retail ten­an­cy guide along with a yet-to-be-devel­oped ​“Before you Lease” factsheet.

By set­ting out pre-lease doc­u­men­ta­tion in the reg­u­la­tions as opposed to the Act, the gov­ern­ment may be able to react more dynam­i­cal­ly to the needs of the retail leas­ing sec­tor, by mak­ing reg­u­la­to­ry changes rather than leg­isla­tive amend­ments. In prac­tice how­ev­er, it means that Land­lords and Ten­ants will need to be well versed in both the Act and its reg­u­la­tions in order to be ful­ly compliant.

Dis­clo­sure Statements

The Bill pro­pos­es that the cur­rent­ly pre­scribed ver­sions of the lessor and lessee dis­clo­sure state­ments includ­ed at Sched­ule 2 of the Act are to be omit­ted with dis­clo­sure state­ments to be adopt­ed in the regulations. 

As with pre-lease doc­u­men­ta­tion described above, bump­ing the pre­scribed form of dis­clo­sure state­ments from the Act to the reg­u­la­tions may allow for quick­er and more proac­tive changes to the rel­e­vant dis­clo­sure state­ments, with­out the need for leg­isla­tive amendment.

The Com­mis­sion has not pro­posed sub­stan­tial alter­ations to the con­tents of the already famil­iar pre­scribed lessor and dis­clo­sure statements. 

How­ev­er, the Com­mis­sion has rec­om­mend­ed the cre­ation of tai­lored dis­clo­sure state­ments for non-shop­ping cen­tre retail premis­es, shop­ping cen­tre retail premis­es and sub­leas­es under a head lease or Crown lease, but there has (as yet) been no indi­ca­tion of whether this pro­pos­al will be adopt­ed. The Com­mis­sion opines that hav­ing three dif­fer­ent types of dis­clo­sure state­ments will ​“make each dis­clo­sure state­ment more rel­e­vant, con­cise and eas­i­er to understand.”

In our opin­ion, while this may reduce the length of indi­vid­ual dis­clo­sure state­ments, this will cre­ate unneed­ed com­plex­i­ty for unrep­re­sent­ed Land­lords and Ten­ants and is more like­ly that unrep­re­sent­ed par­ties will employ the wrong form of dis­clo­sure state­ment and face poten­tial mon­e­tary penal­ties under the Act.

Inter­est­ing­ly enough, the Bill does not pro­pose any change or amend­ments to assign­or dis­clo­sure state­ments in accor­dance with Sched­ule 2A of the Act. The Com­mis­sion has rec­om­mend­ed some changes to assign­or dis­clo­sure state­ments, and it is like­ly that this will be addressed in the next tranche of leg­isla­tive reforms.

Time peri­ods for dis­clo­sure statements

The Bill pro­pos­es that Land­lords and Ten­ants who are legal­ly rep­re­sent­ed or have sought the advice of a lawyer, may agree in writ­ing to reduce or waive the 7 day peri­od between the pro­vi­sion of a lessor dis­clo­sure state­ment and enter­ing into a lease. This approach is cur­rent­ly adopt­ed in Queens­land, the North­ern Ter­ri­to­ry and in the Aus­tralian Cap­i­tal Territory.

For Land­lords and Ten­ants work­ing to a tight sched­ule, this abil­i­ty to obtain a waiv­er will ensure that all par­ties can remain legal­ly com­pli­ant pro­vid­ed they obtain the required legal advice. 

In our opin­ion, this will be a great ben­e­fit to both legal­ly rep­re­sent­ed Land­lords and Ten­ants that are involved in high-vol­ume retail leas­ing trans­ac­tions and will cut the need for unwant­ed but leg­isla­tive­ly required delays.

Lease prepa­ra­tion expenses

The Bill pro­pos­es remov­ing a restric­tion on costs recov­ery for lease prepa­ra­tion costs so that such costs can now be payable by a Ten­ant in cir­cum­stances where an exist­ing lease could have been assigned, but the par­ties instead agreed to enter into a new lease.

The Act already per­mits a Land­lord to recov­er its rea­son­able costs for legal or oth­er expens­es incurred as part of the con­sent to assign­ment of lease, and in our opin­ion in prac­tice, this is unlike­ly to cause any major upsets to either Land­lords or Tenants.

Ancil­lary uses for retail premises

The Bill pro­pos­es amend­ments to pro­vide clar­i­ty about the appli­ca­tion of the Act to retail leas­es which include an ancil­lary use (such as car park­ing, stor­age or sig­nage) where such an ancil­lary use would nor­mal­ly be exclud­ed from the appli­ca­tion of the Act.

This will pro­vide con­sis­ten­cy for both Land­lords and Ten­ants and sim­pli­fy the appli­ca­tion of the Act for car park­ing, stor­age spaces or sig­nage licences where those uses are in con­junc­tion with oper­at­ing a retail business.

Out­go­ings Statements

Land­lords can expect low­er costs and less red tape relat­ing to the pro­vi­sion of out­go­ings state­ments for each account­ing peri­od. The Act cur­rent­ly requires that all out­go­ings state­ments are to be accom­pa­nied by an audi­tor’s report pre­pared by a reg­is­tered com­pa­ny audi­tor. The Bill seeks to amend this require­ment so that audi­tor reports are only required to be pro­vid­ed where the leased premis­es are with­in a retail shop­ping cen­tre. Where the leased premis­es are not with­in a retail shop­ping cen­tre, a report pre­pared by a cer­ti­fied prac­tis­ing accoun­tant will be sufficient.

Rent fol­low­ing relocation

The Bill pro­pos­es to widen the scope for deter­min­ing rent for a premis­es fol­low­ing a relo­ca­tion notice. The Act cur­rent­ly states that ​“the rent for the alter­na­tive shop is to be the same as the rent for the exist­ing retail shop, adjust­ed to take into account the dif­fer­ence in the com­mer­cial val­ues of the exist­ing retail shop and the alter­na­tive shop at the time of relo­ca­tion.” The Bill pro­pos­es that rent fol­low­ing a relo­ca­tion is now be adjust­ed tak­ing into account not only the dif­fer­ence in com­mer­cial val­ues between the exist­ing shop and the alter­na­tive shop at the time of relo­ca­tion but oth­er com­mer­cial fac­tors, including:

(a) the expo­sure of each shop to foot traffic;

(b) the retail mix that sur­rounds each shop; and

(c) the road frontage of each shop; and

(d) the shape, nature and inter­nal con­fig­u­ra­tion of each shop.

The Com­mis­sion pro­vides an exam­ple of this in their rec­om­men­da­tions – for an ice cream par­lour, it may be of high­er com­mer­cial val­ue to be locat­ed in an enter­tain­ment precinct rather than a fash­ion precinct, even if both shops are of equiv­a­lent mar­ket value.

This amend­ment will hope­ful­ly lead to a more accu­rate assess­ment of rent for new premis­es and con­sid­er­a­tion of the par­tic­u­lar­i­ties of indi­vid­ual busi­ness­es fol­low­ing a relocation.

Turnover rent for pharmacies

In good news for phar­ma­cy ten­ants, the Bill pro­pos­es to bring the Act in line with the Health Prac­ti­tion­er Reg­u­la­tion (Adop­tion of Nation­al Law) Act 2009 (NSW) (HPRA) to pro­vide greater clar­i­ty to phar­ma­cy ten­ants. The HPRA voids the charg­ing of any turnover or per­cent­age rent, and the Bill pro­pos­es amend­ing the Act so as to exclude ​“any prof­its or tak­ings of a phar­ma­cy busi­ness” from form­ing part of turnover for the pur­pos­es of deter­min­ing rent or form­ing part of a com­po­nent of rent.

This amend­ment has been pro­posed as a direct result of feed­back from the phar­ma­ceu­ti­cal indus­try which notes that while phar­ma­ceu­ti­cals may have a high cost, they pro­vide lit­tle to no prof­its to a phar­ma­cy tenant. 

Is it real­ly reform?

Debate in the Leg­isla­tive Assem­bly (at the date of this arti­cle) has cur­rent­ly been adjourned and is expect­ed to con­tin­ue on Par­lia­men­t’s next sit­ting date of 11 Novem­ber 2025. We will con­tin­ue to mon­i­tor the progress of this Bill and com­mence­ment of the amend­ments and pro­vide updates when available.

Noth­ing in the Bill will cause huge waves in the world of retail leas­ing. There is a gen­er­al sense of loos­en­ing some restric­tions by mov­ing pre­vi­ous­ly leg­isla­tive require­ments to the Act’s reg­u­la­tions, and this will hope­ful­ly allow future gov­ern­ments to react speed­i­ly and proac­tive­ly to future rec­om­men­da­tions and in response to the demands of the retail sec­tor. Whether this leads increased clar­i­ty and to less red tape and reduced costs for Land­lords and Ten­ants in prac­tice will remain to be seen. 

Swaab has an expe­ri­enced team of leas­ing lawyers who are avail­able to assist you with your retail leas­ing requirements.