First question: does the Act apply?
Whether your premises are a "retail shop" under the Retail Shop Leases Act 1994 (Qld) changes the entire negotiation, because the Act's protections cannot be contracted out of and prevail over inconsistent lease terms.
Resolve this before you negotiate, not after. A lease drafted as though the Act does not apply, for premises where it does, contains terms that are simply void — and a tenant who does not know that will comply with them anyway.
The protections that override the lease
Where the Act applies
- Disclosure. The lessor must give a prospective lessee a disclosure statement at least 7 days before the lease is entered into.
- Minimum term. Rent reviews, outgoings and other minimum standards are set by the Act and cannot be contracted out of.
- Ratchet clauses void. A provision preventing rent falling on a market review has no effect.
- Land tax not recoverable from a retail shop tenant.
- Outgoings recoverable only where properly disclosed, with annual estimates and audited statements.
- Contracting out prohibited — the Act prevails.
The terms that actually matter
Rent is the number everyone negotiates. These are the terms that determine whether the lease works.
- Term and options, and when options must be exercised
- Rent review mechanism — fixed, CPI or market
- Permitted use, and how narrowly it is drafted
- Outgoings, and what is included
- Make good obligations at the end of the term
- Assignment and subletting rights
- Personal guarantees and bank guarantees
- Who repairs what, including structure and services
Make good is the clause tenants most often overlook and most often regret. An obligation to return the premises to base building condition can cost tens of thousands at a point when the business is leaving and cash is tight. Negotiate it at the start, photograph the condition on day one, and keep the record.
A narrow permitted use clause is the other trap. If the lease permits only one specific use, you may be unable to change what you sell, and you will certainly find it harder to assign the lease when you sell the business.
Options to renew
Options are lost by silence
An option to renew must be exercised strictly within the window the lease specifies — commonly between 6 and 12 months before expiry, and usually by written notice in a particular form.
Miss it and the option is generally gone, whatever your relationship with the landlord. Diarise every option date the day you sign. It is the most common and most avoidable loss in commercial leasing.
Outgoings
Outgoings are where a lease's real cost hides. Rates, insurance, body corporate levies, cleaning, security, management fees and centre marketing can add substantially to base rent.
Under the Act, outgoings are recoverable from a retail shop tenant only where they have been properly disclosed, and the lessor must provide annual estimates and audited statements. Land tax cannot be recovered at all. A tenant who has been paying land tax under a retail shop lease should get advice.
For commercial leases outside the Act, there is no such protection and outgoings are whatever the lease says. That is a reason to negotiate a cap.
Assignment — the exit
If you ever intend to sell the business, the lease is much of what you are selling. A buyer needs certainty of tenure, and if the landlord can withhold consent unreasonably, or the remaining term is short, the sale price suffers or the sale fails.
Where the Act applies, an assignor has its own disclosure obligations to a prospective assignee, at least 7 days before the earlier of the assignee agreeing to buy the business or the landlord being asked to consent. Landlord consent is frequently what delays a business sale, so start it early.
Note also that assigning a lease does not automatically release you. Without a formal release, an outgoing tenant — and any guarantor — may remain liable if the incoming tenant defaults. Negotiate the release, do not assume it.
When it goes wrong
Retail tenancy disputes in Queensland have their own process, and mediation is a required step before a matter proceeds to the tribunal. Common disputes involve outgoings reconciliations, market rent reviews, make good at the end of term, and repairs to structure or services.
Most resolve at mediation. The commercial reality is that a landlord wants a paying tenant and a tenant wants to keep trading, so a negotiated outcome usually beats a determined one.
What it costs
- Fixed fee for a lease review
- Fixed fee for preparing a standard lease
- Assignment and renewal quoted separately
- Registration fees at cost
- Stage estimates for disputes
- Advice on what is worth negotiating
Frequently asked questions
It applies to retail shop leases in Queensland, and whether particular premises qualify is a threshold question worth resolving before you negotiate. Where it applies, the protections cannot be contracted out of and the Act prevails over inconsistent lease terms, so a lease drafted as though the Act does not apply may contain terms that are simply void.
Not under a retail shop lease. The Retail Shop Leases Act 1994 (Qld) provides that land tax cannot be recovered from a retail shop tenant in Queensland. If you have been paying land tax under a retail shop lease, get advice.
Strictly within the window your lease specifies, commonly between 6 and 12 months before expiry, and usually by written notice in a particular form. If the window passes the option is generally lost regardless of your relationship with the landlord. Diarise every option date on the day you sign.
An obligation to return the premises to a specified condition at the end of the lease, sometimes base building condition. It can cost tens of thousands at exactly the point a business is leaving and cash is tight. Negotiate it at the start, photograph the condition on day one, and keep the record.
It depends on the lease and, where it applies, the Retail Shop Leases Act. Where the Act applies, an assignor also has its own disclosure obligations to a prospective assignee, generally at least 7 days before the landlord is asked to consent. Landlord consent is frequently what delays a business sale, so start the process early.
Possibly. Assigning a lease does not automatically release the outgoing tenant or any guarantor, who may remain liable if the incoming tenant defaults. A formal release should be negotiated as part of the assignment rather than assumed.
More information
Commercial leases should never be considered as one and the same. Getting the lease perused by a lawyer is a must.
Commercial leasing lawyers Rockhampton
If you’re considering a commercial lease, at the outset you need to understand that there are various types of commercial leases, depending on the type of business that will be run from the premises.
In this context, there is no such thing as a lease agreement that fits all businesses, despite what may be told to you.
For example, if you’re opening a cafe or a retail outlet, your lease will generally be governed by relevant legislation. In Queensland, this is the Retail Shop Leases Act 1994 and it imposes numerous conditions on both the Landlord and Tenant that you need to be aware of before considering the lease agreement.
We frequently draft and negotiate all types of leases for both landlords and tenants. We have extensive experience in the acquisition and disposal of commercial, retail, industrial and residential properties.
- Retail, commercial and industrial leasing
- Due diligence
- Reviewing lease documents
- Complex leasing negotiations
- Retail legislation compliance
We can also assist with:
- Business Structuring
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- Business Succession, Shareholder & Management Agreements
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- Commercial Property Conveyancing
- Agribusiness
- Hiring and Chattel Leases
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- Mining Resource and Resumption
- Taxation
- Insolvency
- Personal Property Security Register
- Mediation
Our professional team has extensive experience in a wide range of legal areas. Our approach is one of planning and involvement. We will continue to be there to support you with accurate and timely advice.
This page is general information about the law as it applies in Queensland, current as at 2026. It is not legal advice and does not take your circumstances into account. Figures set by regulation are indexed and change. Speak to one of our lawyers before acting.