Where the lease relates to land, buildings and office space the owner is called the "landlord" and the lessee is called the "tenant".

The lessor is the person who grants the right to occupy a premises or shop under a retail shop lease and alessee is the person who has the right to occupy a premises or shop under a retail shop lease.

The Retail Leases Act 1994 applies to "retail shop leases". This term is defined by the Act to include businesses that are generally considered to be retail businesses. There are some exclusions such as shops with a lettable area of 1,000 square metres or more. Business owners considering a retail shop lease should get legal advice.

The lessor and the lessee should ensure the lease complies with the guidelines set out in the Retail Leases Act.

For more information about the Retail Leases Act 1994 or entering into a retail shop lease, visit the New South Wales Government's Retail Tenancy Unit.

Most leases hold the lessee responsible for keeping the premises, fixtures and fittings in good repair. Many leases provide for payment of all or part of strata levies such as local council and water rates, insurance, maintenance and other costs. These items should be detailed in the lease document. These costs are in addition to the agreed base rent.

Vacating the premises before the lease expires will require the business owner to continue paying rent and ongoing costs unless a new tenant or sub-tenant can be found.

The cost of repairing damage beyond reasonable wear and tear is borne by the lessee. At the conclusion of the lease term, the lessee is also liable for costs incurred to restore the tenancy to its original condition. These costs can include replacement of partitions if removed or removal of custom flooring to its original condition. These costs are found in the “make good” clause of the lease.