Own a retail shop? Manage a centre? Sign leases for your business? The rules of the game in New South Wales are about to change – and the winners will be those who see it coming. The Retail Leases Amendment (Review) Bill 2026 has cleared the Legislative Assembly and is now with the Legislative Council. Once passed, it will overhaul the Retail Leases Act 1994 (the Act) in line with the recent statutory review. The new law – the Retail Leases Amendment (Review) Act 2026 – will start on a date the Government proclaims. So, what’s actually changing, and what does it mean for you?

The Bill replaces an earlier version from 14 October 2025, with one important tweak: licensed conveyancers – not just lawyers – can now help parties agree to waive or shorten the seven-day lessor disclosure statement window. All of the substantive changes sit in Schedule 1, which amends the Retail Leases Act 1994 (NSW). Here’s what you need to know.

What’s changing and why it matters

Setting the scene: a modernised Act

A clear purpose written into the Act

The Bill will introduce an express statement of purpose into the Act. New section 2A says the Act aims to give retail landlords and tenants basic safeguards and a fair process for negotiating and managing leases; make sure key information (including financial obligations) is disclosed up front; keep lease negotiations reasonably transparent; deliver dispute resolution that is quick and cost-effective; apply appropriate rules to businesses of every size; and promote good leasing practices across the board.

Cleaner, clearer definitions

The Bill tidies up the language of the Act. The ‘lessor’s disclosure statement’ and ‘lessee’s disclosure statement’ become the ‘lessor disclosure statement’ and ‘lessee disclosure statement’. A ‘lawyer’ is now clearly defined as an Australian legal practitioner. These changes flow through the rest of the Act and Schedule 2A.

Which shops the Act covers

Section 5(d) is being reworked to draw a clearer line around which premises fall outside the Act. Premises used only for regulation-prescribed ‘excluded uses’ will stay out of scope – unless they are ancillary to the retail shop under the same lease.

Transparency and disclosure: a new standard

More open dealings from day one (new section 9)

New section 9 puts more transparency into the earliest stages of leasing. Before a landlord can offer, invite offers for, or advertise a shop for lease, a copy of the proposed lease must be available for a prospective tenant to inspect (maximum penalty: 50 penalty units). Once negotiations start, the landlord must also make available a copy of the proposed lease and any documents required by regulation (again, maximum penalty: 50 penalty units). At this early stage, the proposed lease does not yet need to show the tenant’s details, the lease term or the rent.

A refreshed disclosure regime (new sections 11, 11A and 11B)

The disclosure statement process is getting a full refresh. The landlord must give the incoming tenant a written lessor disclosure statement at least seven days before the lease is signed (maximum penalty: 50 penalty units). The parties can shorten or waive that seven-day window in writing, provided each side has engaged and taken advice from a lawyer or licensed conveyancer. They can also agree in writing to give themselves longer than seven days.

The tenant then has seven days from receiving that statement to give the landlord a lessee disclosure statement in return (maximum penalty: 50 penalty units). Each disclosure statement will have to use an adopted form (published in the Gazette and picked up by regulation), include the information the regulations prescribe and come with the documents the regulations prescribe. On a lease renewal, the parties can simply provide a written update to the previous disclosure statement, together with a copy of that earlier statement.

Disclosure statements can also be amended by written agreement – before or after the lease is signed – and the amendment can take effect from a date the parties choose, including one earlier than the amendment itself.

The most significant change is a new right for tenants. Under new section 11B, a tenant can walk away from the lease if the lessor disclosure statement was never given in accordance with section 11, was incomplete, or contained materially false or misleading information at the time it was given. That right must be exercised within six months of signing the lease. It won’t be available where the landlord acted honestly and reasonably, ought reasonably to be excused, and the tenant is in substantially as good a position as if the failure had not happened.

Termination takes effect as soon as the tenant hands the landlord written notice. From that point, the tenant can claim back the costs it reasonably incurred in entering the lease, including fit-out. Anything that had already accrued – rights, obligations, liabilities – stays where it was.

Old disclosure content retired

A few provisions are on the way out: Part 11 (the COVID-19 pandemic response provisions), Schedule 1A (Excluded uses) and Schedule 2 (Lessor and lessee disclosure statements) will all be repealed. That’s consistent with disclosure content moving into the regulations and adopted forms under new section 11. Does this mean that there will be a form of disclosure statement (or disclosure statements) brought about by this repeal? Does this mean that in future the disclosure statement will be able to be repealed and changed very quickly?

Rent, valuation and outgoings: fairer, sharper rules

A sensible tweak to the key-money rules

The general ban on key-money and lease preparation expenses stays. But a new subsection clears up a common issue: where an existing lease could have been assigned to the incoming tenant and the parties chose to enter a fresh lease instead, the landlord can still charge a reasonable amount for the lease preparation costs.

A carve-out for pharmacies from turnover rent

Turnover rent can no longer be calculated by reference to the profits or takings of a pharmacy business, as defined under Schedule 5F of the Health Practitioner Regulation National Law (NSW). If you run or lease to a pharmacy, that changes how rent can be structured.

Higher standards for outgoings audits

Outgoings statements will need to come with an auditor’s report. For shops in a retail shopping centre, that report must be prepared by a registered company auditor. In other cases, a certified practising accountant will do.

A fairer approach to relocation rent

If a tenant is relocated to another shop, the old formula only adjusted the rent for the difference in commercial value between the two shops. The new test is broader and looks at real-world commercial factors as well – foot traffic exposure, the surrounding retail mix, road frontage, and the shape, size and internal layout of each shop.

Timing, notices and scope: real-world flexibility

Fairer timing for executed copies and registration

The three-month period for the landlord to hand over an executed copy of the lease can be extended to cover real-world delays. That includes waiting for head lessor or mortgagee consent (unless the landlord did not make reasonable efforts to obtain it), or the tenant not providing the paperwork – such as proof of insurance or bank guarantees – that the landlord needs.

The same extension applies to the three-month registration period, plus one extra ground for delays that come from Real Property Act 1900 requirements outside the landlord’s control.

A clear definition of ‘expiry’ for end-of-lease notices

The Bill introduces a new definition of ‘expiry of a lease’ for the purposes of the landlord’s end-of-lease notice obligations. In practice, expiry means the end of a renewed or extended lease where one applies, or otherwise the end of the lease itself.

Mixed-use leases: only the retail part is covered

Section 79 is being replaced. The Act will apply to a mixed-use lease only to the extent it covers a retail shop and premises ancillary to that shop’s operation – think car parking, signage or storage space.

Existing leases: what happens on day one?

Existing leases stay on the current rules

A new transitional Part will be added to Schedule 3. The changes made by the Retail Leases Amendment (Review) Act 2026 will not apply to a lease entered into, or a disclosure statement given, before the amendments commence. Those leases and statements will keep operating under the current rules.

What does this mean in practice?

So what’s the bottom line? This is one of the most significant refreshes of NSW retail leasing law in years. It follows the statutory review of the Act and reaches almost every part of the leasing lifecycle – a more form-driven disclosure regime and a new lessee termination right for defective disclosure, stronger pre-lease transparency, a pharmacy carve-out from turnover rent, a broader test for relocation rent, higher standards for outgoings audits, and clearer rules on mixed-use leases. And the now-redundant COVID-19 response provisions? They’re finally being retired.

The good news: nothing changes overnight. The transitional rule protects current leases and disclosure statements until the amendments commence, and a new lease is signed – or a new disclosure statement is given – after that date. But here’s the catch: are your standard leases, negotiation processes and disclosure practices really ready for day one? Landlords, tenants and their advisers who move first will be the ones setting the pace. If you’d like a partner to help you get ahead of the changes and future-proof your portfolio or business, our team is ready to help.

This article was written by Gary Newton, Partner, and Paul Tran, Senior Associate.