In summary, the amendments would create indictable offences where a landlord, without reasonable excuse, knowingly allows illicit tobacco to be possessed, or to be sold or otherwise supplied from its premises.
Similar measures have been introduced in Queensland and comparable reforms also passed in New South Wales. The intent is, in effect, to target landlords who “turn a blind eye” to unlawful activity, creating a stronger deterrent.
The Bill’s drafting indicates that the conduct of any person would be captured, meaning it could extend to anyone using the premises, beyond those with whom the landlord directly contracts, such as subtenants or licensees of a tenant. It also raises practical and evidentiary questions as liability would turn on whether the landlord “knowingly” permitted the conduct and, if so, whether the landlord can establish a reasonable excuse to rebut that position. This may give rise to grey areas, including whether knowledge may be inferred such as from routine landlord inspections or managing lease agent reports.
The Bill does propose to give landlords termination rights where a long‑term closure order is in effect, preventing a tenant from operating their business at the premises. This would enable landlords to re‑let the premises to a new tenant to mitigate loss.
New Proposed Offences Could Change how Commercial Leases are Managed
These proposed reforms are particularly relevant for landlords leasing to higher risk tenants involved in the sale of tobacco or vapes, as well as to businesses where tobacco sales are not the primary use and illegal activity may be more easily concealed.
A likely consequence is that landlords will need to adopt a more proactive lease management approach, including maintaining detailed inspection records, documenting relevant communications with tenants and taking timely action where concerns arise about a tenant’s activities.
We are monitoring the progress of this Bill. If you have any questions, please reach out to Bethany Visser, Senior Associate, or any member of the Madgwicks Property and Finance Team.