Briefing

New Illicit Tobacco Bill aimed at landlords

The Public Health (Tobacco) Amendment (Landlord Offences) Bill 2025 introduces new obligations and penalties for Landlords who permit the sale of illicit tobacco or vapes on their property.

The new offence

In November 2025, the NSW Parliament introduced the Public Health (Tobacco) Amendment (Landlord Offences) Bill 2025 (the Bill). The Bill amends the Public Health (Tobacco) Act 2008 (NSW) (the Act) to introduce new obligations and penalties on Landlords who knowingly permit a Tenant to use their property to sell illicit tobacco or illegal vaping products.

The Bill proposes to:

extend lease termination rights in favour of Landlords where the NSW Government has issued a closure order against the premises; and

make it an offence for a Landlord, who is aware their property is being used for the sale of illicit tobacco or illegal vaping products, but fails to notify authorities or take reasonable steps to evict such Tenants.

The offence will carry a maximum penalty of a $165,000 fine (1, 500 penalty units), one year imprisonment or both.

It is anticipated that the scope of the Bill will extend the penalties to directors of Landlord entities, property managers and agents, if such individual knowingly authorised or permitted the contravention of the relevant provision of the Bill.

Broader termination rights in response to closure orders

Section 50J of the Act allows a Landlord or licensor to terminate a lease or licence for retail shop premises if a closure order is in effect.

The Bill proposes to expand the following definitions:

‘lease’ and ‘licence’ to include the use of premises for ‘the sale of goods or services by retail or wholesale’ and
‘lessor’ to include a person who grants or proposes to grant the right to occupy the premises for the purpose of the use of the premises for ‘the sale of goods or services by retail or wholesale’.

These changes would allow for termination of a broader range of leases or licences than just retail shops. The Bill also seeks to apply the new definitions retrospectively.

What should Landlords do in response to the Bill?

These changes form part of the NSW Government’s recent crackdown on illicit tobacco and vaping products. Landlords must be prepared to act quickly if they become aware of illicit sales on their property as failure to do so may result in criminal liability.

Landlords and manging agents should update due diligence procedures to verify the legitimacy of prospective Tenants and related licensing requirements.

Additionally, it is recommended that Landlords implement continued monitoring of leases with ‘higher risk’ permitted uses such as tobacconist, convenience stores and mixed retail outlets and keep evidence of the steps taken to mitigate the risk of contravening the Bill.

The HFW team will provide a further update once the Bill passes.

In the meantime, we can assist with advising on risk management to ensure compliance with the proposed reforms.

Samantha Lawson, Senior Paralegal, and Freya Moore, Paralegal, also contributed to the publication of this briefing.