In short
The document decides the outcome. A lease, a licence, a sublease, an assignment and a business purchase all put a practitioner into consulting rooms, but they give different rights, and the difference shows up when the practice wants to expand, share rooms or sell.
The Retail Leases Act 1994 (NSW) may or may not apply. It catches premises used for a business prescribed in Schedule 1 of the Retail Leases Regulation 2022 (NSW), and separately catches premises used for any business at all inside a retail shopping centre. That second limb is the one that catches clinics, and it changes the disclosure the landlord owes, who pays lease preparation costs, whether the lease must be registered, and how a dispute is run.
Am I signing a lease or something else?
Similar-looking premises get documented in very different ways.
A practitioner may be:
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taking a direct lease from the landlord
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taking an assignment of a seller's existing lease
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subleasing part of a larger tenancy
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using rooms under a licence, or
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acquiring premises rights as part of buying a practice
Those structures are not interchangeable.
A licence usually gives less security and fewer rights than a lease. A sublease can be terminated when the head lease ends, so the sublessee's position is only as good as the head tenant's. An assignment normally needs the landlord's consent, and the consent process can run past the settlement date in a practice sale.
The distinction matters most in a transaction. A buyer who pays for goodwill built on a location, a patient base and a phone number has bought very little if the premises rights cannot be secured on the same terms after settlement.
Does the Retail Leases Act apply to my clinic?
Premises qualify as a retail shop in either of two ways.
The first is by business type. Premises used wholly or predominantly for a business prescribed in Schedule 1 of the Retail Leases Regulation 2022 (NSW) are a retail shop, whether or not they sit in a shopping centre.
The second limb catches many clinics. Premises used for any business in a retail shopping centre are a retail shop, whatever that business is. A retail shopping centre means a cluster of premises where at least five are used wholly or predominantly for listed businesses, the premises share the same owner, lessor or head lessor or are lots in a single strata plan under the Strata Schemes Development Act 2015 (NSW), and they sit in one building or in adjoining buildings.
So a practice in a standalone medical centre is often outside the Act. The same practice in a neighbourhood shopping centre next to a chemist, a bakery and a newsagent may well be inside it.
Section 5 then carves premises back out, including where the lettable area is 1,000 square metres or more and for premises used only for the uses listed in Schedule 1A. Sections 6 and 6A exclude certain long and short term leases, though a tenant in possession for more than a year through renewals is brought back in.
What changes if the Act applies?
The Act overrides the lease, so the protections cannot be drafted away.
The landlord must give a disclosure statement at least seven days before the lease is entered into, and if it is not given, or is materially false, misleading or incomplete, the tenant has a right to terminate within a period running from when the lease was entered into.
Undisclosed outgoings are not payable by the tenant. Key money is prohibited and the landlord cannot pass on its lease preparation costs. Certain leases must be registered, and bank guarantees and other forms of security are regulated. There is no longer a minimum five year term, that requirement having been removed on 1 July 2017. Retail tenancy disputes must go to mediation through the NSW Small Business Commissioner before proceedings can be started.
Does the permitted use cover what I actually do?
A permitted use of "office" or "consulting rooms" is often too narrow.
Test the clause against the full service list, not just the current one: treatment and procedure rooms, pathology collection, group or rehabilitation sessions, sessional and contractor practitioners, extended or after hours trading, clinical waste storage and collection, deliveries, and signage on the facade and in the building directory.
Building rules, strata by-laws and centre rules sit alongside the lease and can restrict the same things independently.
Planning consent is a separate question again: a landlord agreeing to a use does not mean the council has approved it.
Signage is where the lease meets professional regulation. Practitioner names, titles and claims on signage are advertising for the purposes of section 133 of the Health Practitioner Regulation
National Law, which prohibits false or misleading advertising, testimonials, and claims creating unreasonable expectations.
What will fit-out and make good cost me?
Medical fit-out is expensive and specific, and it goes into someone else's building.
Sinks, waterproofing, soundproofing, accessible entry, data cabling and equipment plinths are all capital you may not recover. The lease should say who does the works, who approves them, who pays for services upgrades or compliance work the fit-out triggers, and whether a landlord contribution becomes repayable on early exit.
Make good is read last and costs most. A requirement to strip a clinical fit-out and reinstate to base building can be substantial, and it falls due when the practice has already stopped earning from the site.
Can I share rooms or bring in contractors?
Room sharing, sessional arrangements and contractor practitioners are ordinary in practice, and many leases do not permit them without consent. Head leases commonly restrict assignment, subletting, licensing, parting with possession and sharing occupation. A room licence granted in breach of those restrictions puts you in default of your own lease, which is a poor thing to discover during a practice sale. Where other practitioners will use the rooms, the lease needs to permit it in terms, and the room licences need to sit inside what the lease allows.
What happens when I sell the practice?
Premises rights usually sit at the centre of a practice sale.
A buyer needs enough remaining term, or an option, to justify what is being paid for goodwill.
The assignment provisions govern how that happens: what the landlord can require, what the buyer must provide, and whether the seller stays liable afterwards. Personal guarantees given by a seller often survive assignment unless expressly released.
If the arrangement is a room licence rather than a lease, there may be nothing capable of being assigned at all.
Termination and re-entry clauses are worth reading before signing rather than after a default. Section 129 of the Conveyancing Act 1919 (NSW) governs the notice a landlord must give before forfeiting a lease for breach, and a clause drafted to allow immediate re-entry does not displace it.
What happens if the lease ends badly?
Relocation and demolition clauses are the other exposure. A clause allowing the landlord to relocate or terminate on notice for redevelopment can end a practice's tenure at a location it has spent years building patients around. Where the Act applies it regulates those clauses and the compensation payable.
Which documents will answer these questions?
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For the arrangement: the draft lease, licence, sublease or assignment, any agreement for lease, and anything already signed.
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For the Act: the landlord's disclosure statement, the lettable area, the other tenancies in the building or centre, and the ownership or strata position.
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For use: the permitted use clause, building or centre rules, strata by-laws, the development consent, and current signage.
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For cost: the fit-out schedule and any landlord contribution, the outgoings estimate, the make good clause, rent review, option dates, and guarantee terms.
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For a sale: the business sale agreement, the existing lease, the landlord's assignment requirements, and contractor and room licence documents.
Our commercial and retail leasing for tenants page covers tenant side lease work, and our purchase of business page covers premises rights in a practice sale.
If you are reviewing a lease, licence, assignment, or practice sale involving medical or allied health premises, contact Biz Lawyers & Advisory or call 1800 893 836 before signing.
This article provides general information only. It is not legal, healthcare regulatory, privacy, Medicare, clinical, building, planning, tax, finance or valuation advice.
Primary sources
Law and guidance checked 20 August 2026.
