New Illicit Tobacco Laws: What Commercial Landlords Need To Know

Recent changes to Queensland’s tobacco laws have introduced significant new risks for commercial landlords whose tenants sell tobacco, nicotine or other smoking products.

The changes were introduced by the Tobacco and Other Smoking Products (Dismantling Illegal Trade) and Other Legislation Amendment Act 2025 and commenced on 24 November 2025. The laws are aimed at disrupting the trade of illicit tobacco and illicit nicotine products in Queensland.

For landlords, the key point is simple: a landlord may now face serious consequences if they permit leased premises to be used for the supply or possession of illicit tobacco or illicit nicotine products.

Who is a “relevant lessor”?

The new provisions apply to a “relevant lessor”.

A relevant lessor is generally the person who leases premises directly to a person conducting a tobacco business at the premises, or who otherwise directly allows that person to occupy the premises.

The legislation defines “lease” broadly to include any right to occupy the premises. This means the provisions may apply beyond a traditional written lease.

However, the provisions do not generally apply to a head lessor who leases premises to another person who is not occupying the premises for the purpose of conducting the tobacco business.

In practical terms, the regime is directed at the person who has the direct leasing or occupancy relationship with the business operating from the premises. In shopping centre, subleasing, licence or franchise arrangements, this distinction may be important. Landlords and property managers should seek advice on their particular structure if there is uncertainty about who holds the direct legal relationship with the tobacco business.

Criminal liability for landlords

A relevant lessor must not permit another person to use the premises for the supply or possession of illicit tobacco or illicit nicotine products as part of a business activity.

However, the criminal offence only applies if the landlord knowingly permits the premises to be used for that purpose.

The Explanatory Notes indicate that this offence is intended to capture more serious conduct, where a lessor has actual knowledge of the unlawful activity and allows it to continue. The Explanatory Notes also give examples of matters which may amount to a reasonable excuse, including where a lessor is actively taking steps to terminate the relevant arrangement, did not receive notice of a closure order and had no reason to suspect illegal conduct, or where other circumstances beyond the lessor’s control explain the tenant’s continued occupation.

The maximum penalty for the offence is 1,000 penalty units (currently equivalent to $166,900), 1 year’s imprisonment, or both.

The penalty unit value is set to increase to $172.70 from 1 July 2026, so dollar values should be checked at the relevant time.

Civil penalties may also apply

The legislation also creates a civil penalty regime.

The Chief Executive may apply to the court for a civil penalty order if satisfied that a relevant lessor has contravened the provision.

The maximum civil penalty is:

for an individual lessor: 1,000 penalty units, currently equivalent to $166,900; and
for a corporate lessor: 5,000 penalty units, currently equivalent to $834,500.

Importantly, the Explanatory Notes distinguish the civil penalty regime from the criminal offence. Actual knowledge does not need to be proven for the civil penalty. The civil penalty is intended to apply where a lessor has been recklessly indifferent to illegal conduct, or has failed to take reasonable steps to prevent it despite warning signs or opportunities to act.

When deciding whether a relevant lessor has contravened the provision, the court may consider matters including:

whether there is a pattern of supply or possession of illicit tobacco or illicit nicotine products at the premises;
whether the landlord has been notified by Queensland Health that one or more closure orders have been made in relation to the premises;
whether the landlord and tenant are dealing at arm’s length;
whether the rent is significantly above market value or paid well in advance;
whether the lease is in writing; and
whether the landlord has taken steps to terminate the lease or otherwise prevent the supply or possession of illicit tobacco or illicit nicotine products at the premises.

This means landlords should be cautious about ignoring warning signs. A landlord who suspects illegal activity but takes no action may still face serious financial consequences, even if the higher criminal threshold of actual knowledge cannot be proven.

Closure orders and the right to terminate a lease

The amendments also give landlords an important statutory termination right.

If a closure order is made in relation to leased premises, Queensland Health must generally give the relevant lessor a copy of the closure order and a notice explaining:

the reason for the closure order;
that the order may allow the landlord to terminate the lease; and
that the landlord may be liable for a criminal offence or civil penalty if the premises continue to be used for the supply or possession of illicit tobacco or illicit nicotine products.

A relevant lessor may then terminate the lease by giving the tenant a termination notice. The termination date must be at least fourteen (14) days after the notice is given, and the termination notice must be given before the closure order ends.

This statutory termination right applies despite anything to the contrary in the lease, another agreement, or another Act. It also applies even if the closure order is later revoked, found to have been wrongfully made, or found by a court to be invalid.

The legislation also provides that a landlord who terminates under this statutory power is not liable for damages or compensation in relation to the termination, and may enter and take possession of the premises after termination.

Notification obligation if the lease ends

Landlords should also be aware of a separate notification obligation.

If premises are subject to a closure order and the lease ends, the closure order ends when the lease ends. However, if the relevant lessor has been given a copy of the closure order, the lessor must notify Queensland Health within 7 days after the lease ends.

Failure to give that notice, without a reasonable excuse, carries a maximum penalty of 10 penalty units, currently equivalent to $1,669. Although this is a relatively modest administrative penalty, it is still a positive compliance obligation landlords should be aware of.

This means that a landlord’s obligations may not end simply because the lease has been terminated or has otherwise expired. If a closure order has been issued, the landlord should ensure that any required notice is given to Queensland Health promptly.

What should commercial landlords do?

Commercial landlords should not ignore possible signs that premises are being used for illicit tobacco or nicotine trade.

Landlords should consider:

reviewing lease terms for tenants who sell tobacco, nicotine, vapes or smoking products;
ensuring leases contain appropriate compliance, inspection, termination and indemnity provisions;
keeping written records of any concerns, notices, complaints or steps taken;
acting promptly if they receive a closure order or notification from Queensland Health;
giving any required notice to Queensland Health if the lease ends after a closure order has been issued;
seeking legal advice before terminating a lease or taking possession of premises; and
being cautious where rent is unusually high, paid well in advance, or where the trading arrangements appear unusual.

The safest position for landlords is to be proactive. If there are signs that a tenant may be dealing in illicit tobacco or illicit nicotine products, doing nothing may create serious legal and financial risk.

Need advice?

ABKJ Lawyers can assist commercial landlords, property managers and business owners with lease reviews, compliance issues, notices and lease termination rights arising from Queensland’s tobacco and nicotine product laws.

If you are concerned about a tenant’s use of commercial premises, or have received a closure order or notice from Queensland Health, contact our commercial and property law team for advice.

Call (07) 5532 3199 or submit an enquiry online to discuss your matter.