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Retail Lease

New South Wales Retail Lease Tenants – Outgoings

by Kristy Collins, Senior Associate


Changes to the Retail Leases Act 1994 (NSW) in 2017 brought about potentially costly restrictions on a Landlord recovering Outgoings payable by a Tenant under a Retail Lease.

In both New South Wales and Queensland jurisdictions, any tenant who is looking into a Retail Lease must be provided with a Lessor Disclosure Statement outlining a number of relevant matters which are included in the Lease. One of those matters is whether the Tenant is required to contribute to the Landlord’s Outgoings and, if so, an estimate of the expected Outgoings for the first year of the Lease must be disclosed.

The New South Wales amendments have resulted in a more positive obligation on landlords to ensure the Outgoings they list in their Disclosure Statement are as accurate as possible as at the time the Disclosure Statement is presented. Additionally, the Lease must specify Outgoings that are deemed to be recoverable and how the amount of such Outgoings will be calculated and apportioned to the Tenant (particularly where the Premises being leased is subject to a cluster of shops all owned by the same Landlord).

If the Landlord fails to disclose the liability of the Tenant to pay a particular Outgoing in the Disclosure Statement, the Tenant will not be liable to pay that amount to that Landlord in respect of that Outgoing for the duration of the Lease.

The failure of any landlord to comprehensively disclose liabilities in relation to Outgoings could have drastic financial effects on the Landlord and there may be potential for liability to shift to any legal representative of the Landlord if they have not properly advised their client of the impact of these provisions of the Act.

Awareness and implementation of the amendments to the New South Wales legislation has been in effect for some time. However, it is unlikely that the true ramifications of any errors in the Lessor Disclosure Statement are yet to be discovered or, alternatively, decisions yet to be handed down by the Tribunal. Stay tuned for future updates in this area and to see whether Queensland introduces similar provisions into its legislation.

Call Fedorov Lawyers on 1300 768 719 to book an appointment for advice on your lease today.

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