We specialise in commercial, industrial and retail leasing and have acted for many years for both landlords and tenants. Our clients include shopping centre landlords, multi storey commercial landlords, commercial and industrial landlords and tenants of major shopping centres. 

We can assist in all aspects of leasing including:-

  • Negotiating the terms of a lease;
  • Drafting leases;
  • Arranging for registration of lease;
  • Providing advice in respect of disputes and representing landlords and tenants in alternative dispute resolution processes;
  • Acting for landlords and tenants in the Administrative Decisions Tribunal, District Court and Supreme Court. 

For further advice please contact Andrew Mackenzie for an obligation free telephone discussion or send us an email.

Leasing FAQ


How do I know if a commercial lease is a retail lease?

Retail leases in NSW are governed by the Retail Leases Act 1994 (NSW) (Act).

In order for a lease to apply to premises the business conducted from the premises must:-

(a) Be a type of business included in the list in  Schedule 1 of the Act; or
(b) Be conducted in premises located in a retail shopping centre.

Even if one of the above conditions is satisfied the Act will not apply to any of the following:-

(a) Leases for a term of 25 years or more (with the term of a lease taken to include any term for which the lease may be extended or renewed at the option of the tenant),

(b) Shops that have a lettable area of 1,000 square metres or more,

(c) Shops that are used wholly or predominantly for the carrying on of a business by the lessee on behalf of the lessor,

(d) Any shop within premises where the principal business carried on on those premises is the operation of a cinema, bowling alley or skating rink and the shop is operated by the person who operates the cinema, bowling alley or skating rink,

(e) Any premises in an office tower that forms part of a retail shopping centre,

(f) Any other lease of a class or description prescribed by the regulations as exempt from this Act.

What are main differences between a retail lease and a non retail commercial lease?

The Act creates an additional level of regulation governing the relationship of tenants and landlords, prescribing procedure and practice where it applies. The aim of the Act is to provide additional protection to retail tenants. Some examples of the differences are as follows:-

Section 9 of the Act requires the landlord to provide the tenant with a copy of the proposed form of lease at the negotiation stage.  In a non retail commercial lease the landlord would not normally provide you a draft lease until negotiations have been finalised.

Section 11 of the Act requires the tenant be provided with a summary document known as a lessor's disclosure statement setting out important matters such as an estimate of the outgoings payable before the commencement of the lease. There is no such requirement for non retail commercial leases.

Section 14 of the Act prohibits the cost of preparation of the lease from being passed on to the tenant. In a non retail commercial lease a landlord often seeks payment from the tenant of the landlord's legal costs of preparation of the lease

Section 16 of the Act imposes obligations on the landlord with respect to security deposits including lodging same with the Retail Tenancy Unit. A landlord in a non commercial lease has no such obligations and is not required to lodge a security deposit with any regulated body or government department.

Section 17 to 32 of the Act provide tenant's with protection with respect to rent payable to and outgoings recoverable by a landlord. There are no such protections in a non retail commercial lease and the provisions of the lease itself govern such matters.

What is the difference between a security deposit and a bank guarantee?

Most landlords require security to protect them for any loss they might suffer due to the default of a tenant under the terms of a lease. That security can be provided by way of payment of cash known as a security deposit or by giving to the landlord a bank guarantee which is a piece of paper issued by a financial institution which can be presented to the issuer (the financial institution) and in consideration of surrendering that piece of paper the favouree (the landlord) will be paid by the financial institution the guaranteed amount.

The benefit of the bank guarantee from the point of view of the tenant is that cash is not under the control of the landlord during the term of the lease. This is particularly important in non retail commercial leases as the landlord is not required to lodge the security deposit with Retail Tenancy Unit and can intermingle that money with the landlord's money. 

The disadvantage is that the financial institution may require a cash deposit to be held by the financial institution for the term of the guarantee and in addition will charge fees, both up front and ongoing for the guarantee.  

What are outgoings and who pays them?

A tenant is often required under the terms of a lease to pay outgoings in addition to rent. Outgoings typically include Local Council rates and charges, water authority rates and charges, land tax, cleaning and maintenance obligations and for those tenancies located in a strata scheme, the strata levies.  

Generally the terms of the lease set out who is responsible for what outgoings. It is important that the landlord and tenant are clear and in agreement as to who is to pay what outgoings.  The Act in the case of retail leases provides some restrictions on the recovery of outgoings by a landlord from a tenant and to the extent that a lease may be inconsistent with the restrictions in the Act the lease is of no effect to the extent of the inconsistency.

I am a tenant under a retail lease and have a dispute with my landlord.  What are my options?

The first step should always be to approach the landlord or the managing agent and discuss the issues and seek to resolve the dispute informally.  It is always a good idea to keep written records of the terms of any resolution in case of disagreement at some later time. If the dispute cannot be resolved informally most leases have provisions relating to alternate dispute resolution and subject to legal advice you should follow the dispute resolution procedure in the lease.

The Act also provides a dispute resolution process for retail lease disputes and an application can be made to Administrative Decisions Tribunal in NSW under Section 71 of the Act to seek the assistance of that tribunal to resolve disputes. You should seek legal advice before making such an application.

I am a landlord under a retail lease and have a dispute with my tenant.  What are my options?

A landlord under a retail lease should follow the same steps as the advice for a tenant in the previous answer. A landlord can make an application to the Administrative Decisions Tribunal in the same way as a tenant can.

What about disputes under non retail commercial leases?

The Administrative Decisions Tribunal does not have jurisdiction to assist the parties with resolving a dispute. The parties should seek to resolve the dispute informally and if they are unable to do so should look at the alternative dispute resolution provisions in the lease.  Both a landlord and a tenant can commence proceedings in the Local, District or Supreme Court of NSW to seek to have the dispute resolved. Legal Advice should be obtained at an early stage in a lease dispute and certainly proceedings should not commenced in any court without advice having been received as to which is the appropriate court.

I am a tenant and want to exercise my option for a further period.  How do I do this?

You must look at the terms of the lease and exercise the option strictly in accordance with the lease. Normally this requires the tenant to serve a formal notice on the landlord at some time before the expiry of the current lease. It is not unusual for the lease to require the option be exercised many months (sometimes longer) before the end of the lease.  An incorrect or out of time option notice can result in the tenant not receiving the benefit of the option and being required to vacate the premises. It is important to obtain legal advice before you attempt to exercise an option to make sure it prepared and served strictly in accordance with the terms of the lease. 

What is a market rent review?

Most leases provide for rent to be reviewed annually. The most common methods are for rent to increase by a fixed percentage, for it to be increased by reference to the Consumer Price Index or for it to be reviewed to market. A market rent review involves a determination of the rent payable by looking at what the rent would likely be if a new tenant was entering into a new lease with the landlord. The lease should contain detailed provisions relating to the matters which can and cannot be considered when determining market rent. Parties should always try and negotiate and come to an agreement as to the new rent before the market review date. In the event the parties cannot agree most leases provide that a valuer who specialises in the type of premises being valued performs a market rent review. Whatever the valuer determines is the new market rent and subject to limited rights the parties may have under the terms of the lease or under general law the valuation is binding on both parties.

Retail lease tenants and landlords should be aware that the Act provides additional requirements to the Lease itself in respect of market rent reviews. Of particular interest to tenants may be the right under Section 32 to have the new market rent determined early and before they have to choose whether or not to exercise an option for a further term they may have under the lease.