The New South Wales (NSW) Government is escalating its crackdown on the booming illicit tobacco and vape trade, introducing a new bill that places significant responsibility – and potential penalties – on landlords. Health Minister Ryan Park has formally introduced an amendment to the 2008 Public Health Tobacco Act, which aims to prohibit landlords from knowingly permitting the sale of illicit tobacco and vaping products on their premises.
This legislative move is designed to be a crucial "piece of the puzzle" in reining in the widespread illegal trade, which has permeated communities across the state. Under the proposed amendment, landlords who knowingly lease to illegal tobacco and vape sellers will be legally required to report such tenants to NSW Health authorities. Failure to do so could result in severe penalties, including up to one year imprisonment, a $165,000 fine, or both.
Minister Park explained that authorities will ensure landlords are notified if their tenants are caught selling illegal substances. "If we carry out inspections and we issue a 90-day closure [to the tenants], we will make sure the landlord is also notified at that period of time that we've issued that closure," he stated. He hopes this will prompt landlords to reconsider tenants who re-offend, thereby reducing the number of illegal outlets. "What we expect of landlords across NSW right now to be starting to do is have those conversations with their lessees... and if they are suspicious, making it very clear to them both verbally and in writing that this is illegal and needs to stop," Park added.
This bill amendment complements other recent measures, including new categories of offenses, increased inspections, and significantly higher penalties – up to $1.5 million and seven years' imprisonment – for those caught possessing commercial quantities of illegal tobacco. The government's strategy is to disrupt the business model of illicit traders by targeting every link in the chain.
Concerns from Landlords and Real Estate Experts
While the government views this as a necessary step, the proposed changes have raised concerns among landlords and real estate professionals. One landlord, who wished to remain anonymous, highlighted a lack of clear communication from authorities after their tenant's premises were raided. They were never officially notified whether illegal products were found and were surprised when the tobacconist was able to re-open elsewhere. This landlord suggested that after a police raid, authorities should notify landlords directly and ensure the illicit business is permanently shut down.
Tim McKibbin, CEO of the Real Estate Institute NSW, expressed reservations about the bill effectively turning landlords into "policemen." He pointed out that landlords are typically bound by "quiet enjoyment" clauses in leasing contracts, which imply they shouldn't be constantly inspecting their tenants' premises. This could create a conflict between a landlord's legal obligations to their tenant and their new proposed obligation to police illicit activities.
However, McKibbin suggested that the problem might resolve itself through market forces. He noted that insurance companies are already wary of tenants involved in tobacco sales, often increasing premiums significantly. If insurance companies refuse to cover tenants selling illegal tobacco, or if a landlord cannot get insurance for their premises due to such a tenant, it would become financially unfeasible for those tenants to operate. This could act as a powerful disincentive without directly requiring landlords to become enforcement agents.
The bill amendment has no current timeline for parliamentary debate, but its introduction signals a determined effort by the NSW Government to curb the illicit tobacco and vape trade.
