NSW landlords - new laws may impose liability for illicit tobacco and vape sales

Proposed amendments to the Public Health (Tobacco) Act 2008 (NSW) may significantly expand landlord liability in New South Wales. Commercial and retail landlords who knowingly allow illicit tobacco or unlawful vaping products to be sold from their premises could face serious penalties, including fines and imprisonment. These reforms form part of the NSW Government’s broader effort to disrupt illegal supply chains and increase accountability across the property sector.

What is changing under NSW tobacco and vaping laws?

The proposed amendments would create a new offence for landlords who knowingly permit a tenant to sell:

• illicit tobacco, or

• vaping goods that are unlawful under NSW law,

from premises they own.

The offence is directed at situations where landlords are aware of illegal activity and allow it to continue, rather than at landlords who are genuinely unaware or who take reasonable steps once issues are identified.

What does “knowingly” mean for landlord liability in NSW?

The legislation does not define “knowingly”, so it is expected to take its ordinary meaning - requiring actual awareness, rather than mere suspicion.

In practice:

• unsubstantiated suspicion or general industry awareness is unlikely on its own, to amount to knowledge; but

• clear indicators such as inspections, complaints, regulator correspondence or tenant admissions may give rise to knowledge, particularly if no action follows.

How this element is applied will ultimately depend on enforcement practice and judicial interpretation.

Penalties

The proposed penalties are serious. Landlords may face:

• significant monetary fines; and 

• in some cases, imprisonment. 

This reflects the Government’s position that landlords should not profit from, or turn a blind eye to, unlawful activity on their premises.

What NSW landlords should be doing now to manage compliance risk

Although currently the legislation is not yet in force, landlords and property managers should consider taking compliance steps as part of their active risk management. Practical steps include: 

• Licensing checks – confirming and periodically re-checking that tenants selling tobacco or vaping products hold valid licences and approvals

• Lease drafting – ensuring leases contain clear obligations to comply with all public health, licencing and criminal laws, supported by effective breach, termination and re-entry rights

• Monitoring and inspections – staying alert to indicators of illicit trade, including complaints, unusual trading activities or contact from regulators and authorities

• Prompt action and response – issuing breach notices, seeking explanations, reporting matters to authorities where appropriate and taking enforcement steps

• Record‑keeping – keeping detailed clear records of inspections, correspondence, complaints and responses to demonstrate active management.

The proposed NSW reforms send a clear message: landlords are expected to actively monitor and respond to illicit tobacco and unlawful vaping activity on their premises. As enforcement practices develop, early compliance and documented risk management will be critical for NSW landlords seeking to avoid criminal liability.

Our team regularly advises landlords and property managers on regulatory compliance, leasing risk and enforcement exposure. If you would like assistance reviewing your leasing arrangements or compliance frameworks, please contact us.

Authors: Stella Sun & Courtney Best

This publication is intended as a source of information only. No reader should act on any matter without first obtaining professional advice.