No Release Clauses in NSW Retail Leases
- Barn Wilkes
- Mar 3
- 2 min read
I have contacted the NSW Small Business Commissioner about the alarming trend of legal firms and landlords inserting unlawful "No Release" clauses into Retail Leases despite the statutory protections of the Act that are designed to prevent this.
𝐖𝐡𝐚𝐭 𝐝𝐨𝐞𝐬 𝐭𝐡𝐞 𝐋𝐚𝐰 𝐬𝐚𝐲?
The primary goal of the 𝐑𝐞𝐭𝐚𝐢𝐥 𝐋𝐞𝐚𝐬𝐞𝐬 𝐀𝐜𝐭 𝐍𝐒𝐖 is to protect tenants from unfair lease terms imposed by landlords, and by their representatives.
𝐒𝐨 𝐰𝐡𝐚𝐭 𝐢𝐬 𝐡𝐚𝐩𝐩𝐞𝐧𝐢𝐧𝐠?
We’ve observed a growing pattern where landlords and legal firms unlawfully impose ongoing liability on outgoing tenants (assignors) and their guarantors for the remainder of the lease. This directly contravenes Section 41A of the Retail Leases Act 1994 (NSW), which protects tenants from liability after the lease has been assigned.
𝐓𝐡𝐞 𝐏𝐫𝐨𝐛𝐥𝐞𝐦:
Despite clear legal protections, some landlords continue inserting “No Release” clauses that force outgoing tenants to remain liable for lease obligations even after assignment.
𝐊𝐧𝐨𝐰 𝐘𝐨𝐮𝐫 𝐑𝐢𝐠𝐡𝐭𝐬:
✅ If you’re selling your business and assigning a lease, you should NOT remain liable for rent or obligations post-assignment.
✅ Guarantors must be released upon assignment.
✅ Any clause stating otherwise is unenforceable and unlawful.
🔎 Before signing any lease assignment paperwork, ensure that these clauses are removed. If in doubt, seek expert advice.
We urge The Law Society of NSW to do better and issue guidance to its members, and to drive law reform to eliminate this predatory legal practice.
📢 Have you encountered a "No Release" clause?
Let’s discuss in the comments. 👇
If you need assistance with the sale of your business and lease transfer:
𝐁𝐨𝐨𝐤 𝐚𝐧 𝐂𝐡𝐚𝐭:
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