Currently awaiting assent, the NSW Parliament has passed the Public Health (Tobacco) Amendment (Landlord Offences) Bill 2026 (Bill), introducing new compliance obligations and risks for lessors.

The legislation forms part of a broader push by the Minns Government, with Minister for Health, Ryan Park, emphasising the policy intent behind the reforms:

“Landlords who intentionally allow tenants to sell illicit tobacco and illegal vapes are not only undermining legitimate business operations, but they are exposing their community to associated criminal activities.”

Key changes

New criminal offence for landlords

The Bill inserts a new section 11A into the Public Health (Tobacco) Act 2008 (Act), making it an offence for a commercial lessor to knowingly permit the sale of illicit tobacco or illicit vaping goods on their premises.

The maximum penalty for such an offence is:

1. 1,500 penalty units ($165,000.00); and/or
2. imprisonment for 1 year.

“Commercial lessor” defined

The offence applies to any person who grants a right of occupation or use of premises wholly or predominantly for the sale of goods or services by retail or wholesale, unless the lessee has granted another person that right under a further agreement. Accordingly, the offence extends beyond just landlords and may capture any party to an “agreement”, which is broadly defined in the Bill to include leases, licences, subleases and sublicences.

Knowledge threshold and defence

The offence requires that the commercial lessor “knowingly permits” the sale of illicit goods and places an evidentiary burden on the lessor to satisfy the court that they had a “reasonable excuse” for permitting the sale of illicit goods.

Closure orders and public notices

The Bill further amends the closure of premises regime under Part 6A Act. Authorities can impose both short-term and long-term closure orders where there are illicit goods being sold.

Short-term closure orders can be imposed by the Secretary for up to 90 days, without prior notice or an opportunity to be heard.

Long-term closure orders are imposed by the Local Court for up to 12 months, where the Court is satisfied that “a relevant breach has occurred, or is likely to occur, on the premises.”

Where a closure order is made, the Secretary must post a copy of the order on the front of the premises (or nearby) and may also publish the order online. In addition, the Secretary must provide notifiable persons, including the landlord, with:

1. a copy of the closure order; and
2. a statement explaining the effect of the order, the reasons for it, and the lessor’s ability to terminate the lease, as well as the new offence prohibiting landlords from knowingly permitting illicit sales.

As of 24 April 2026, NSW Health had issued 220 short-term closure orders since 3 November 2025, with 158 currently in force.

Expanded termination rights

The Bill further amends section 50J of the Act, which operates to allow a lessor or licensor to terminate any lease or licence on at least 28 days’ written notice where a closure order is in effect.

Any termination under this section is deemed to have occurred due to repudiation by the tenant, who is precluded from bringing proceedings in respect of that termination.

This mechanism operates despite any statutory protections under the:

1. Real Property Act 1900;
2. Retail Leases Act 1994; and
3. Small Business Commissioner Act 2013.

The Bill also amends section 50J clarify and expand the relevant definitions of “lease”, “licence” and “lessor”.

Finally, the Bill clarifies that these termination provisions apply to leases and licences entered into both before and after commencement of the Public Health (Tobacco) Amendment (Landlord Offences) Act 2026.

Next steps

The reforms are part of a broader enforcement strategy targeting illicit tobacco and vaping supply chains. The Minister made clear the Government’s position:

“This legislation builds on our extensive efforts to crack down on illegal tobacco and vapes across the state, and with a bolstered workforce, we are prepared to tackle this problem head on.”

“We are sending a clear message to those people, including landlords, who are doing the wrong thing – sooner or later, we will come for you.”

The Bill will commence on a date to be proclaimed, at which point the new offence will apply to landlords who are aware of tenants selling illicit tobacco or vaping goods from their premises and fail to take appropriate steps, such as reporting or terminating the relevant tenancy.

This article was written by Martin Downing, Partner, Matthew Powell, Partner, Gary Newton, Partner, and Helena Tryphon, Solicitor.