Retail Lease Agreement | Retail Leases Acts NSW, VIC, QLD

A commercial lease is a contract and an interest in land under which a landlord grants a tenant exclusive possession of business premises for a fixed term in return for rent. That exclusivity separates it from a licence, which is why shopping centre kiosks and coworking desks are usually documented by licence. Unlike the residential tenancy agreement used for homes and apartments, a business lease has no prescribed standard terms, and the parties negotiate almost everything.

Within that family, practitioners draw a firm line between a retail lease and a general commercial lease. A retail lease covers premises used wholly or mainly to sell goods or services to the public: a café, a hairdresser, a pharmacy. Retail legislation overrides the contract, imposes disclosure obligations, limits what the landlord can recover and sends disputes to a small business commissioner before any tribunal. Offices, factories and warehouses usually fall outside those Acts and depend on the lease, the state property statute and the general law of contract. Getting the classification wrong is the most expensive error in business leasing, because a lease drafted as commercial but caught by a retail Act loses every clause that contradicts the statute.

Retail leasing is regulated state by state. The principal statutes are the Retail Leases Act 1994 (NSW), the Retail Leases Act 2003 (Vic), the Retail Shop Leases Act 1994 (Qld), the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) and the Retail and Commercial Leases Act 1995 (SA), with equivalent laws in Tasmania, the ACT and the Northern Territory. They share one architecture. Each Act operates despite the lease, so a clause that contracts out of the statute is void to the extent of the inconsistency. The landlord must deliver a lessor's disclosure statement before the lease is entered into, and in New South Wales s.11 lets the tenant terminate within 6 months and claim compensation if the statement was missing, incomplete or materially misleading. The full text, including the Schedule 2 disclosure form, is in the current NSW Retail Leases Act 1994 published by NSW Legislation.

Leases outside the retail regime rely on general property statutes: the Conveyancing Act 1919 (NSW), the Property Law Act 1958 (Vic) and the Property Law Act 2023 (Qld), which commenced on 1 August 2025 and requires a landlord to decide a consent request within one month of receiving the required particulars (s.142).

Two Commonwealth layers sit on top. The unconscionable conduct provisions of the Australian Consumer Law reach leasing negotiations, and since 9 November 2023 unfair terms in standard form small business contracts, leases included, attract civil penalties. When a party is a company, execution follows s.127 Corporations Act 2001, which is where the tenant's company constitution and rules on who can sign become relevant.

The most common trigger is a business taking premises for the first time: a café operator signing for a strip shop, a dental practice fitting out a first floor suite, a trade supplier moving into a warehouse. Landlords who hand over keys on the strength of an agent's letter of offer create a periodic tenancy on uncertain terms, and in retail premises the disclosure deadline has usually passed already.

Renewals come next. When a tenant exercises an option, the reviewed rent needs recording, and several states require an updated disclosure statement. The third trigger is a change of ownership. A sale of business normally involves an assignment of lease, the incoming operator's financial disclosure and fresh guarantees. Where the buyers are several investors, their shareholders agreement for the operating Pty Ltd should match who guarantees the lease.

A less obvious use is regularising a handshake arrangement in a family owned building where a tenant has paid rent for years on a one page memo. The retail Acts apply to informal arrangements too, and undisclosed outgoings are generally not recoverable. Franchise sites and subleases are the edge cases: in Queensland the franchisor or sublessor carries its own disclosure duties (ss.21C and 21D Retail Shop Leases Act 1994).

• The parties and guarantors clause names the landlord, the tenant entity with its ACN and every guarantor. A lease signed by a director personally when the business trades through a company leaves the landlord suing the wrong person.
• The premises and permitted use are described precisely enough to settle whether a retail Act applies, and narrowly enough to protect the tenancy mix without trapping a tenant whose business evolves.
• The term and options to renew state the exercise window for each option as calendar dates. Missed option dates remain among the most litigated points in commercial leasing.
• The rent review clause applies one method per review date: fixed percentage, CPI or current market rent. Victoria prohibits combining methods at the same review (s.35 Retail Leases Act 2003), and ratchet wording is excluded.
• The outgoings schedule lists each category the tenant contributes to and the apportionment basis. Recovery is tied to the disclosure statement and annual estimate, so no charge appears that the tenant has not seen.
• The security clause covers the bond or bank guarantee, expressed in months of rent, and the conditions for its release.
• The repairs, fitout and make-good provisions keep structural repairs with the landlord and require the tenant to reinstate the premises at the end of the term, fair wear and tear excepted, measured against a dated condition report.
• The assignment, relocation and dispute provisions follow the statutory procedures, including consent timeframes, compensation for relocation or demolition, and mediation before any tribunal claim.

New South Wales abolished the five year minimum term in 2017, so parties can agree a two year retail lease without a solicitor's certificate. The disclosure regime stays strict. The lessor's statement in the Schedule 2 form must be given at least 7 days before the lease is entered into, and undisclosed outgoings cannot be recovered unless they are new statutory charges. A retail lease of more than three years must be registered within three months of the landlord receiving the signed lease. Disputes go first to the NSW Small Business Commissioner and then to NCAT.

Victoria keeps the five year minimum term under s.21 Retail Leases Act 2003. A shorter lease is extended automatically unless the tenant obtains a certificate from the Victorian Small Business Commission and gives it to the landlord. The disclosure statement and proposed lease must reach the tenant at least 14 days before signing, and if they arrive late the term is taken to start 14 days after delivery (s.17(1C)). Section 50 voids any clause passing on land tax. VCAT will generally not hear a retail lease dispute until the Commission certifies that mediation has failed (s.87).

Queensland has no minimum term, but s.21B Retail Shop Leases Act 1994 requires a draft lease and the Form 7 disclosure statement at least 7 days before the tenant signs. A defective or late statement gives the tenant a right to terminate within 6 months. The landlord must provide an audited statement of outgoings each year (s.38A), and the consent regime of the Property Law Act 2023 applies to dealings after 1 August 2025 even under older leases.

Western Australia protects tenure differently. Section 13 of the Commercial Tenancy (Retail Shops) Agreements Act 1985 can entitle a tenant to a term of at least five years, and s.13C obliges the landlord to give written notice before an option expires. The landlord's legal costs are not claimable from the tenant (s.14B). South Australia, Tasmania, the ACT and the Northern Territory follow similar principles with their own forms, and our Australian property and tenancy templates cover the notices that follow once a lease is running.

You start by choosing the state or territory where the premises are located and answering a short question about how the space will be used. That answer decides whether the retail disclosure and rent review rules switch on. The questionnaire then collects the parties, including the ACN of any company and the details of each guarantor. The next screens take the commercial terms from the letter of offer: commencement date, term, options, starting rent, review method for each anniversary and the outgoings categories with their percentage share. Security, insurance and the make-good standard come last. The disclosure statement is generated from the same answers, so the figures in both documents match. Before download, a summary shows every date that matters, including the last day to exercise each option. Diarise those dates the day you sign.

The error we see most often is the recycled disclosure statement. A landlord reuses an old statement with a stale outgoings estimate and then discovers the tenant can walk away within the statutory window. Close behind is the hybrid rent review that sets rent at CPI or market, whichever is higher. That wording works as a ratchet and is unenforceable in retail premises in most states. The third is signing through the wrong person: a company lease signed by one director where the company has two, or by an agent relying on an email instead of a general power of attorney covering property dealings.

Tenants make their own errors. Many accept a make-good clause requiring reinstatement to original condition without any record of that condition, then pay to strip out a previous occupant's partitions. Others lose track of the option window, which in a commercial lease agreement on a five plus five structure often closes six months before expiry. A missed option date usually ends the tenancy, whatever the fitout cost. Both sides also leave long leases unregistered, a minor risk until the day the building sells.