A rent increase can be difficult for a small shop to absorb. A disputed outgoings invoice can make the numbers worse. The situation becomes much more serious when a landlord threatens termination or changes the locks.
For a Sydney retailer, the first mistake is treating every lease dispute as a simple argument over what seems fair. The second is assuming that refusing to pay automatically protects the tenant.
The legal position depends on the lease, whether the premises are covered by the Retail Leases Act 1994 (NSW), the type of dispute involved, and what steps have already been taken.
What to do when a NSW commercial lease dispute turns serious
Start with the documents, not the argument.
Pull together the signed lease, the disclosure statement, rent-review provisions, outgoings provisions, recent invoices, payment records, correspondence with the landlord or managing agent, photographs and every notice you have received. The NSW Small Business Commissioner specifically recommends keeping copies of the signed lease and disclosure statement, condition reports, photographs and notes of dealings between the parties.
Then separate the dispute into individual issues.
A tenant may be dealing with three different problems at once:
| Problem | First question |
|---|---|
| Rent increase | What does the lease say about the review date and method? |
| Outgoings | Was this cost disclosed and is the tenant actually liable for it? |
| Termination or lockout | What breach or lease event is being relied upon, and what deadline applies? |
That distinction matters because a tenant might have a valid argument about an outgoing while still being behind on rent. One dispute does not automatically cancel another obligation.
The Commission’s guidance is clear that deliberately withholding rent is risky, even when the tenant believes the landlord is in the wrong.
Does the Retail Leases Act apply to your Sydney shop?
The first question in a NSW commercial lease dispute is often whether the premises are actually covered by the retail leasing legislation.
The NSW Small Business Commissioner says the Act generally applies to a shop under 1,000 square metres that is used for a prescribed retail business, subject to exclusions. A lease may also be covered because the premises are in a retail shopping centre, even where the business itself is not one of the prescribed businesses. The prescribed business list was moved into the Retail Leases Regulation 2022 from 1 January 2023.
The Act normally concerns retail leases running for at least six months and less than 25 years, although particular exclusions and special rules must still be checked.
Do not assume a shop is protected simply because it is located on a shopping strip. Likewise, do not assume a lease is outside the Act simply because the landlord calls it a “commercial lease”.
Classification can affect the dispute process, the information the landlord must provide, the handling of outgoings and the route to NCAT.
For any serious dispute, check the current legislation as well as the lease itself. The NSW Small Business Commissioner also warns that its tenancy guide does not replace professional advice.
Rent hikes: when an increase follows the lease and when it needs scrutiny
A landlord is not necessarily doing something unlawful simply because the new rent is much higher than the old rent.
The critical question is how the lease says rent will change.
The NSW Small Business Commissioner identifies several common review methods:
- fixed percentage;
- CPI;
- current market rent;
- another agreed formula.
Suppose a Sydney retailer is paying $100,000 in annual base rent and receives a review notice. The first response should not be “the increase is too high”. The better questions are:
What is the review date?
What review mechanism does the lease specify?
Does the calculation match that mechanism?
Is there a market-rent process?
Has the landlord used the right starting figure?
Does the lease contain wording that conflicts with the statutory restrictions?
For a market-rent review, the position can be more involved. If landlord and tenant cannot agree, the Retail Leases Act provides a process involving a specialist retail valuer. The NSW Small Business Commissioner can appoint the valuer through its mediation services.
The Commission also notes that market evidence can be gathered from comparable premises, neighbouring tenants, specialist advisers and historical leasing information.
That gives a small retailer something concrete to work with.
Instead of writing to the landlord saying “this rent is unreasonable”, prepare a short evidence pack showing comparable premises, the lease mechanism, the calculation and the commercial effect of the proposed increase.
A weak emotional objection can turn into a much stronger commercial discussion when the numbers are documented.
Watch for the review method, not just the percentage
Some tenants focus entirely on the size of the increase and miss the more basic question of whether the correct review method was used.
The Retail Leases Act contains restrictions around adjustments to base rent and has provisions aimed at preventing certain rent-review structures from functioning as a one-way ratchet.
That does not mean every rent increase is challengeable. It means the lease and the Act should be read together.
Unexpected outgoings: what a retail tenant should check
Outgoings can become the hidden second rent.
They may include management, cleaning, repairs, rates, taxes, levies and other operating costs, depending on the lease and the statutory rules. The NSW Small Business Commissioner says the lease and disclosure statement should clearly specify what the tenant must pay.
The Act imposes additional restrictions. Recoverable outgoings must be appropriately disclosed and connected to the management, operation, maintenance or repair of the relevant building or shopping centre. The statutory scheme also restricts recovery of certain capital costs.
For a tenant disputing an invoice, check four things.
1. Was the outgoing disclosed?
Look at the disclosure statement and the lease schedule.
2. Is the tenant liable for that category?
Do not assume that because the landlord paid an expense, the tenant automatically owes it.
3. Is the allocation correct?
In a shopping centre, look at how non-specific costs are apportioned.
4. Has the landlord provided the required statement or estimate?
For qualifying retail leases, the landlord has statutory obligations concerning estimates and outgoings statements. The NSW Small Business Commissioner says the statement is generally due within three months after the accounting period ends.
There is also a specific statutory process where the landlord has failed to provide a required estimate or statement. After the tenant requests the document in writing and the failure continues for 10 business days, the tenant may have a right to withhold the affected outgoings contribution. Once the document is provided, the withheld amount must be paid within 28 days.
That is very different from simply stopping rent because an invoice looks wrong.
A practical outgoings dispute example
Imagine a Sydney retailer receives:
- the normal monthly rent invoice;
- a separate quarterly outgoings charge;
- a large “building works” amount;
- a management charge that was not explained previously.
Do not send one email saying, “I refuse all of this.”
Separate the charges. Ask for the contractual and disclosure basis of each item. Identify whether the disputed amount is rent, an outgoing, a capital cost or something else. Keep paying amounts that are undisputed unless legal advice indicates another course.
That creates a much clearer record if mediation becomes necessary.
How to respond before a landlord issues a termination notice
A termination dispute is often harder to solve after the relationship has deteriorated.
When the landlord alleges arrears or another breach, read the lease immediately.
Look for:
- the definition of default;
- any grace period;
- notice provisions;
- rights of re-entry;
- interest or late-payment clauses;
- security provisions;
- make-good obligations;
- dispute-resolution clauses.
The NSW Small Business Commission advises tenants who are behind on rent or have received a termination notice to review the contract, seek legal advice where necessary and contact its mediation service about strategic options.
Do not assume an argument about outgoings excuses rent arrears.
Do not assume a payment dispute means a landlord can ignore the notice procedure either.
The practical objective is to identify the exact default alleged, the amount said to be outstanding, the deadline and the remedy the landlord says it can exercise.
Then respond in writing.
How to stop a commercial landlord lockout Sydney
When the search question is how to stop a commercial landlord lockout Sydney, the most important point is speed.
There are two very different situations.
Situation one: the landlord has threatened a lockout
Treat the threat as urgent.
Obtain the lease and all notices immediately. Confirm whether the alleged arrears are correct. Check whether a grace period applies. Obtain urgent legal advice about the landlord’s contractual and statutory rights.
At the same time, consider the NSW Small Business Commission mediation route. The Commission states that urgent mediation can be arranged within days in appropriate circumstances.
A written proposal can also be useful.
For example, a tenant might propose:
payment of the undisputed amount immediately, a timetable for resolving the disputed amount, and mediation of the remaining issues.
That is materially different from simply refusing to engage.
Situation two: the locks have already been changed
The problem is now more urgent.
The NSW Small Business Commissioner says a locked-out retail tenant may consider seeking urgent relief against forfeiture from the appropriate court or tribunal. For retail leases, NCAT has power under the Act to grant relief against forfeiture where appropriate.
NCAT also allows an application for an interim order where urgent reasons require an order stopping an action or preserving the current position.
Because the correct forum and remedy depend on the facts, a tenant who has already been locked out should obtain urgent legal advice rather than relying on a generic online template.
Do not break back into the premises, threaten the landlord, remove locks yourself or dispose of property in the shop.
The priority is a lawful, documented response.
What to do if you have already been locked out
Prepare a same-day file containing:
Lease: the complete signed document and variations.
Disclosure: the retail lease disclosure statement and updates.
Money trail: bank records, invoices, receipts, rent ledger and outgoings statements.
Notices: every breach, termination or demand letter.
Communications: emails, SMS messages and letters with the landlord or agent.
Business evidence: trading figures, photographs and records showing the commercial effect of the lockout.
Security: documents relating to a bond, bank guarantee or other security.
The NSW Small Business Commissioner specifically identifies the lease, disclosure statement, correspondence, reports, receipts and photographs as relevant evidence for retail lease disputes.
The shorter the dispute timeline, the more important the chronology becomes.
Write down:
Date — event — amount — document — response.
That simple structure can save substantial time when another person has to understand the dispute quickly.
Why NSW Small Business Commissioner mediation matters
Retail lease mediation is not just a polite conversation.
For most retail lease claims, it is part of the statutory dispute-resolution pathway before proceedings. NCAT says mediation is compulsory for most retail lease claims and that a mediation certificate must generally accompany the NCAT application.
The NSW Small Business Commission says there is no application or filing fee. A formal mediation conference currently costs $330 including GST per party for up to four hours, with additional fees of $152 per hour per party after four hours.
The service is confidential, and the Commission says that statements made during mediation generally cannot be used in court.
What mediation can actually achieve
Mediation is not limited to “landlord wins” or “tenant wins”.
Depending on the dispute and what the parties can lawfully agree, an outcome might involve:
- staged arrears payments;
- rent adjustments;
- clarification of outgoings;
- a negotiated lease exit;
- a timetable for repairs;
- agreement about make-good work;
- return or replacement of security;
- continued occupation on revised commercial terms.
That flexibility is visible in the Commission’s case studies.
What the Commission’s case studies show
A lockout did not end the negotiation
In one published case, a commercial tenant who had been locked out later faced court proceedings involving about $64,000 plus continuing costs. Mediation was eventually arranged. The landlord accepted $40,000 as a full and final settlement, structured with an upfront payment and smaller payments over three years. The parties also reached an arrangement concerning the tenant’s commercial chattels and make-good obligations.
The lesson is not that a tenant can ignore arrears.
The lesson is that a dispute may still be capable of resolution after positions have hardened.
A Sydney gym used financial evidence
A Sydney gym experienced an 80% fall in sales during the COVID shutdown period. The tenant sought further rent relief after an initial temporary arrangement. During mediation, the tenant was given time to provide further evidence of the fall in turnover. That evidence helped the parties understand the financial position and identify a settlement.
For present-day disputes, the broader lesson is practical: bring evidence.
A request for rent relief backed by sales data, cash flow information and a realistic proposal has a stronger foundation than a claim based only on hardship.
Repairs, arrears and misunderstandings can overlap
A 2024 Commission case involving a small physiotherapy and occupational therapy clinic involved a dispute over major repairs. The tenant stopped paying rent, believing the landlord was responsible for the work. Mediation, including interpreter support, helped the parties identify a misunderstanding in the lease and reach an agreement addressing arrears, future rent and renovations.
That is a useful warning for both sides.
A dispute that looks like “the landlord will not repair the premises” may also contain questions about the lease wording, possession, rent and business interruption.
When NCAT becomes relevant
NCAT’s Consumer and Commercial Division can hear retail lease disputes in NSW.
According to NCAT, it can make orders relating to money, lease rectification, disclosure statements, relief against forfeiture, security bonds and other retail leasing issues.
For retail leases entered into on or after 1 July 2017, NCAT currently states a maximum claim amount of $750,000. For leases entered into before that date, the stated limit is $400,000. NCAT also states a general three-year time limit for retail lease claims, subject to the legislation and specific circumstances.
The tribunal route is therefore significant, but it should not be the automatic first move.
Where mediation is compulsory, skipping it can create a procedural problem. Where there is an urgent injunction-type issue, the rules are different and legal advice is important.
The evidence pack to prepare before mediation or litigation
A good dispute file should allow a third party to understand the matter without hearing ten hours of background.
Document 1: The lease
Mark the clauses dealing with rent, review, outgoings, default, termination, security, repairs and dispute resolution.
Document 2: The disclosure statement
Compare what was disclosed with what is now being charged.
The NSW Small Business Commissioner identifies rent, rent-review method, works, fit-out, outgoings and trading hours among the important matters covered by the disclosure material.
Document 3: The money schedule
Create one table:
| Item | Landlord says | Tenant accepts | Tenant disputes | Evidence |
|---|---|---|---|---|
| Rent | $8000 | $6000 | $4000 | Lease / ledger |
| Outgoings | $6000 | $4000 | $2000 | Statement |
| Repairs | $4500 | $6500 | $2500 | Lease / invoices |
| Other | $1700 | $800 | $1500 | Correspondence |
That table can make a complicated dispute manageable.
Document 4: Chronology
Keep it factual.
“On 4 September, landlord issued notice.”
“On 6 September, tenant requested the outgoings statement.”
“On 12 September, locks were changed.”
Avoid inserting legal conclusions into the chronology.
A practical 48-hour response plan
First few hours
Save every document and message. Do not rely on memory.
Identify whether the problem is an arrears issue, rent-review issue, outgoing issue, termination issue or lockout issue.
Same day
Check the lease.
Calculate the amounts independently.
Identify the exact deadline in every notice.
If the premises are already locked, obtain urgent advice about interim relief or relief against forfeiture.
Next day
Prepare a short written statement of the dispute:
What happened.
What the landlord says.
What the tenant accepts.
What the tenant disputes.
What outcome the tenant proposes.
Then consider mediation.
The Commission says a mediation application can be made without an application fee, and an officer will contact the parties about the next step.
2026 Retail Leases Act reforms: what has and has not changed
This is an important publication-date issue.
The NSW Government is progressing reforms arising from the 2023 statutory review. The review produced 32 recommendations, including 23 requiring legislative amendment. The current bill represents the first tranche and implements 13 of those legislative recommendations.
However, as at 4 October 2026, the bill had passed the Legislative Assembly but remained in the Legislative Council. It was therefore not yet safe to write that all of its proposed reforms were already part of the Retail Leases Act.
For publishers, this distinction matters.
A 2026 article should separate:
Current law — rules already in force.
Proposed reform — changes contained in a bill that has not yet completed the legislative process.
The NSW legislation website should be checked again immediately before publication if the article is intended to remain evergreen.
Sydney tenant checklist
Before signing anything during a dispute, ask:
Does the Retail Leases Act apply?
What does the lease actually say?
Is the rent increase based on the correct review method?
Are the disputed outgoings disclosed and recoverable?
Have the required outgoings statements been supplied?
Has a termination or default notice been issued?
Has the landlord threatened or completed a lockout?
Is urgent interim relief potentially required?
Has mediation been attempted where required?
Is the evidence complete enough for an independent person to understand the dispute?
A good dispute file should answer all ten questions.
Conclusion
A NSW commercial lease dispute can move quickly from a disagreement about an invoice to a threat against the business itself.
For a Sydney retail tenant, the safest approach is not to rely on assumptions about what a landlord “can never do”. Check whether the premises are covered by the Retail Leases Act, read the lease and disclosure material closely, separate rent from outgoings, keep every document and respond quickly to notices.
Do not treat withheld rent as a harmless protest.
Do not wait until the locks have changed before gathering evidence.
And where mediation is required, treat it as a substantive opportunity to resolve the commercial problem, not merely another administrative step. The NSW Small Business Commission’s own case studies show that settlements can still be reached after serious conflict, including situations involving arrears, rent pressure and lockout.
For an existing termination or lockout, the facts and deadlines matter too much for a generic article to determine the correct legal remedy. Urgent professional advice should be obtained where the business’s possession of the premises is at risk.
1. What is a NSW commercial lease dispute?
It is a disagreement between a commercial landlord and tenant about rights or obligations under a lease. For retail premises covered by the Retail Leases Act 1994 (NSW), statutory rules can also apply to matters such as rent, outgoings, termination and dispute resolution.
2. Does the Retail Leases Act apply to every shop in Sydney?
No. Coverage depends on factors including the size and use of the premises, the prescribed business categories, the lease term and whether the premises form part of a retail shopping centre. Exemptions also apply.
3. Can a Sydney landlord increase retail rent whenever they want?
Not necessarily. The lease should specify when and how rent is reviewed, and the Retail Leases Act contains restrictions on rent adjustments. Market-rent reviews can involve the specialist retail valuer process where the parties cannot agree.
4. Can a retail tenant dispute unexpected outgoings?
Yes. The tenant should check the lease and disclosure statement, whether the expense was properly disclosed and whether the charge is recoverable under the statutory rules. Certain capital costs cannot simply be recovered as ordinary tenant outgoings.
5. Can I stop paying rent because I am in dispute with my landlord?
That is risky. The NSW Small Business Commissioner expressly warns that withholding rent during a dispute can place the tenant in breach. A tenant should obtain advice rather than treating non-payment as a general dispute strategy.
6. What should I do if my landlord threatens to lock me out?
Check the lease, verify the alleged default, preserve the evidence, obtain urgent advice and consider contacting the NSW Small Business Commissioner’s mediation service. The Commission says urgent mediation may be arranged within days.
7. What if the landlord has already changed the locks?
A retail tenant may need urgent legal advice about relief against forfeiture or interim orders. NCAT says it can make interim orders in urgent cases and can grant relief against forfeiture in retail lease proceedings where appropriate.
8. Is mediation compulsory for NSW retail lease disputes?
Mediation is compulsory for most retail lease claims before NCAT, subject to exceptions. NCAT specifically identifies applications seeking an order in the nature of an injunction as an exemption from the usual preliminary mediation requirement.
9. How much does NSW Small Business Commissioner mediation cost?
There is no application or filing fee. Current formal mediation costs $330 including GST per party for up to four hours, with additional fees of $152 per hour per party after four hours.
10. How much can I claim at NCAT for a retail lease dispute?
NCAT currently states a maximum claim of $750,000 for leases entered into on or after 1 July 2017 and $400,000 for leases entered into before that date.
11. How long do I have to bring a retail lease claim?
NCAT states a three-year period for retail lease claims measured from when the relevant liability or obligation arose, or from the alleged unconscionable conduct, subject to the Act and specific exceptions.
12. Are the 2026 proposed Retail Leases reforms already law?
Not as at 7 October 2026. The Retail Leases Amendment (Review) Bill 2025 had passed the Legislative Assembly but was still progressing through the Legislative Council. Publication should therefore distinguish the current Act from proposed reforms.
