Retail Shop Lease or Commercial Lease in Queensland?

In Queensland, a lease is generally a retail shop lease if the premises is under 1,000 square metres and used for a retail business of a type listed in Schedule 1 of the Retail Shop Leases Regulation 2016, or if it sits in a retail shopping centre. Offices, warehouses and most industrial premises are usually ordinary commercial leases. The difference matters because a retail shop lease brings extra rules under the Retail Shop Leases Act 1994 (Qld), covering disclosure before signing, the costs a landlord can pass on, and how disputes are resolved. Landlords, tenants and buyers of tenanted property are all better off settling the question before anything is signed.

How do you tell if a lease is a retail shop lease?

According to the Queensland Small Business Commissioner, there are two main ways a lease is caught. The first is a shop under 1,000 square metres used for a retail business of a type listed in the Regulation. The list includes cafés and takeaway food outlets, hairdressers and beauty salons, butchers, bakers, clothing stores, florists, hardware stores and many more. The second is most businesses located in a retail shopping centre, which generally means at least five retail shops owned or controlled by the same landlord. Other exclusions can apply, so check any specific lease with a solicitor.

The size test is easy to get wrong. Tribunal decisions have confirmed that the total area leased counts, not just the part used for retail.

Which premises usually aren't covered?

The Commissioner lists businesses that generally fall outside the Act, including offices, warehouses and storage, gyms, medical centres, real estate agencies, car yards, tyre shops, pubs and wholesalers. Outside a retail shopping centre, most professional suites and industrial sheds will be ordinary commercial leases.

Some premises sit close to the line. A showroom with a workshop out the back, a business that provides a service and also sells products, or a café operating inside a larger venue could each go either way. When the answer isn't clear, get legal advice before the lease is prepared rather than assuming, because the classification changes both the paperwork and the timeline.

What changes under a retail shop lease?

The first change is disclosure. The landlord must give the tenant a lessor disclosure statement (Form 7) at least seven days before the tenant enters the lease, according to the Commissioner's retail lease forms page. The tenant, in turn, must give the landlord a financial advice report and a legal advice report before entering the lease.

If the disclosure statement isn't given, or is defective, the tenant can generally end the lease by written notice within six months of entering it. For a defective statement, there is an exception where the landlord acted honestly and reasonably and the tenant is in substantially as good a position as if the statement had been right.

The second change is outgoings. Under a retail shop lease, a landlord can't pass on land tax, excess payments under the landlord's insurance, or body corporate sinking fund contributions. Recoverable outgoings must be estimated in advance and reconciled in an audited annual statement. Our guide to commercial property outgoings explains how those costs are usually shared.

The third change is how disputes are handled. Retail lease disputes generally go to mediation through the Queensland Small Business Commissioner. If mediation doesn't resolve the matter, the Queensland Civil and Administrative Tribunal can decide it.

What about ordinary commercial leases?

Ordinary commercial leases give the parties more freedom to agree their own terms, so the lease document itself carries more weight. Outgoings, rent reviews, options and make good are largely whatever the lease says, and land tax can be recovered from the tenant if the lease allows it.

That freedom has limits. Since 1 August 2025, Queensland's Property Law Act 2023 has applied to leases more broadly. According to the Commissioner's summary of the changes, a landlord must respond to a request to assign the lease within one month of receiving the information needed, and can't unreasonably refuse consent. A formal breach notice must also be given before a lease is ended for a breach. Many of these rules apply even to leases signed before the change.

What does it mean for landlords?

For a landlord, the biggest risk is timing. When a retail lease is finalised in a hurry, the seven-day disclosure period is easy to squeeze. A late or defective statement creates a termination right that has nothing to do with whether the deal itself was fair. Building the disclosure step into the timeline from the first conversation avoids that.

Classification also affects the numbers. A landlord who assumes land tax can be recovered from a retail tenant will overstate the property's net income.

What does it mean for business tenants?

For a business owner taking a lease, the classification decides which protections apply and what has to happen before signing. Under a retail shop lease, the disclosure statement and the advice reports take time and cost money, so allow for both. Under an ordinary commercial lease, the lease is your main protection. An option to renew, a clear make-good clause and a permitted use broad enough for your business to grow into are worth negotiating before you commit, particularly if you're paying for a fit-out.

What should you check when buying a property with a lease in place?

If you're buying a shop or commercial building with a tenant in place, the type of lease affects the income you're buying. A retail lease means some costs, such as land tax, stay with the owner, and that changes the true net return. It's also worth asking your solicitor to check that disclosure was handled properly on any recent lease, because a defective statement can give the tenant a right to end it early. Our guide to buying vacant or tenanted commercial property covers the wider choice.

What should you prepare when selling a property with a lease in place?

If you're selling a shop or commercial building with a tenant in place, buyers and their solicitors will want to know what kind of lease it is and whether it was set up correctly. Having the lease, any disclosure statement and recent outgoings statements ready before you list means those questions get clear answers early. A buyer who has to chase paperwork, or who finds a gap late, tends to lose confidence in the income they're paying for.

Why does it matter more in a regional market?

Much of the region's retail space sits in Innisfail's CBD and along the main streets of Tully, Cardwell and Mission Beach. In a market this size, a good tenant can be hard to replace. A lease that ends early because of a procedural slip usually costs a regional landlord more than it would in a city with a deeper pool of tenants. Equally, a local business owner who signs a lease without understanding what kind it is may find there are few other premises to move to.

Is the law changing?

The Queensland Government has been reviewing the Retail Shop Leases Act, and Business Queensland’s review page shows where that review is up to. A review can lead to changes in the rules, so check the current position before relying on any detail here.

The bottom line

Retail or commercial is one of the first questions to settle in any lease of shop or commercial space. The answer decides what paperwork is needed, which costs can be passed on and how a dispute would be handled. Getting it right early protects the landlord's income, the tenant's business and the property's value to any future buyer.

This article is general information, not legal advice, and reflects Queensland law as at October 2026. If the Retail Shop Leases Act changes, we'll update this guide.

Thinking About Selling a Tenanted Shop or Commercial Property?

The type of lease, how it was set up and what the tenant pays all shape what a buyer is really paying for. If you own a shop or commercial property in Innisfail, Tully, Cardwell, Mission Beach or elsewhere on the Cassowary Coast, a free market appraisal is a chance to talk through how buyers are likely to view the property and the lease that comes with it.

No pressure, and no obligation.

Frequently Asked Questions

Is an office lease a retail shop lease in Queensland?

Generally no. The Queensland Small Business Commissioner lists offices among the premises the Retail Shop Leases Act doesn't cover, although premises in a retail shopping centre can be treated differently.

Can a landlord charge a retail tenant land tax?

No. Under the Retail Shop Leases Act, land tax can't be recovered from a retail shop tenant. Under an ordinary commercial lease, it can be recovered if the lease provides for it.

How long before signing must a retail tenant receive the disclosure statement?

At least seven days before entering the lease. If it isn't given, or is defective, the tenant may be able to end the lease by written notice within six months.