Commercial & Retail Lease Services

Hidden Outgoings

Additional expenses like air conditioning maintenance, common area cleaning fees, lift servicing, and promotional levies can add thousands to your annual costs if not properly disclosed upfront or capped in the lease.

Assignment Restrictions

Capacity (or lack of) to assign or transfer the lease if you outgrow the premises or sell your business. Restrictive assignment clauses can trap you in an unsuitable lease.

Make Good Obligations

Requirements to repaint, refurbish, or return premises to original condition upon lease end can cost tens of thousands. These are one of the most common sources of bond disputes.

Rent Review Mechanisms

How rent increases are calculated matters enormously. Fixed increases, CPI adjustments, market reviews, and ratchet clauses all have different implications for your long-term costs.

Operating Hours & Trading Requirements

Mandatory trading hours in shopping centres or requirements to remain open during specific periods can conflict with your business model, staff availability, or profitability.

Landlord’s Right to Relocate

Some leases give landlords the right to relocate you to different premises within the same complex during refurbishment, potentially damaging your established customer base.

Restrictive Use Clauses

Overly narrow permitted use clauses can prevent you from pivoting your business or adding complementary products and services as your business evolves.

Insurance Requirements

Extensive insurance obligations including public liability, plate glass, and business interruption insurance can significantly increase your operational costs.

Bank Guarantee Provisions

Requirements for substantial bank guarantees tie up your business capital and credit facilities, affecting your ability to fund growth or manage cash flow.

Our Approach: We flag these elements during our review process and bring them to your attention so you can make informed decisions about whether to agree to those terms, negotiate variations, or walk away from an unsuitable lease arrangement.

Tips for Tenants

Get Expert Review Early: Have your lease reviewed before signing, not after. Once signed, it’s legally binding and variations are difficult to negotiate. The cost of expert review is minor compared to the financial risks of unfavourable lease terms.

Understand Your Growth Path: Consider where your business will be in 3-5 years. Do you need expansion options? Will the permitted use accommodate product line extensions? Can you sublet or assign if you outgrow the space?

Calculate Total Occupancy Costs: Don’t just focus on base rent. Factor in outgoings, insurance, marketing levies, fit-out costs, and make good obligations to understand your true occupancy expenses over the entire lease term.

Exercise Options in Writing & On Time: Renewal options must be exercised strictly in writing within the timeframe specified in your lease. Missing the deadline by even one day can cost you your tenancy. Diarise deadlines well in advance.

Keep Detailed Records: Maintain copies of all correspondence, notices, and agreements with your landlord. Document the condition of premises with photos and videos at commencement, during the lease, and at handover.

Know Your Retail Lease Rights: If you’re a retail tenant, familiarise yourself with your statutory protections under the Retail Leases Act. Landlords cannot contract out of these provisions, even if lease clauses say otherwise.

Plan for Assignment Early: If you think you might sell your business, understand the assignment process in your lease before you need it. For retail leases, landlords can only refuse on five specific grounds and must respond within 28 days or consent is deemed given.

Tips for Landlords

Document Everything in Writing (Heads of Agreement): Use written Heads of Agreement before drafting the formal lease. This prevents misunderstandings and clarifies what both parties have actually agreed to. Update the HOA if terms change during negotiations.

Comply with Disclosure Requirements: For retail leases, you must provide accurate disclosure statements at least 7 days before signing. Non-compliance gives tenants termination rights, compensation claims, and you face criminal penalties up to 50 penalty units.

Have Draft Lease Available Before Advertising: Under the Retail Leases Act, you must have a draft lease and copy of the Retail Tenancy Guide available to prospective tenants before advertising or offering retail premises for lease. Criminal penalties apply for non-compliance.

Be Consistent with Enforcement: If you say you’ll terminate in 14 days for breach, follow through consistently. Inconsistent enforcement can create waiver or estoppel issues that prevent you from later enforcing lease terms strictly.

Register Leases Exceeding 3 Years: For retail leases, registration is mandatory within 3 months of receiving the signed lease from the tenant. For commercial leases, while not legally mandatory, registration is strongly recommended to protect your interests if the property is sold or mortgaged.

Return Security Promptly: Bank guarantees must be returned within 2 months after tenant fulfils all obligations (with penalties for non-compliance). Retail bonds must be lodged with the NSW Government scheme within 20 business days of receipt.

Understand Assignment Restrictions: For retail leases, you can only refuse assignment consent on five specific statutory grounds. Tenant breach is NOT a valid ground. Respond within 28 days or consent is automatically deemed given. Understand these rules before drafting assignment clauses.

Cannot Recover Lease Preparation Costs in Retail Leases: You cannot charge retail tenants for your legal fees, mortgagee consent fees, or other lease preparation expenses, except in the narrow circumstance of tenant-requested amendments. Build these costs into your rent, not separate charges.

What are Lease Heads of Agreement and why are they important?

Heads of Agreement (HOA) are essential first step documents that record agreed lease terms in writing before the formal lease is drafted. They typically cover rent, lease duration, options, outgoings, rent-free periods, permitted use, and other key terms. HOA prevent confusion and disputes by ensuring both parties are aligned before significant legal costs are incurred. For retail leases, draft leases and disclosure statements must be available during the HOA negotiation phase. Always update HOA if terms change during negotiations.

What is an assignment of lease and how does it work?

Assignment is when a tenant transfers their lease to a new tenant before the lease expires. This commonly happens when selling a business or needing to relocate. Landlord consent is required, but for retail leases, consent can only be withheld on five specific statutory grounds (proposed use change, inferior financial resources/skills, procedural failures, or specific airport/tender circumstances). Tenant breach is NOT a valid ground for refusal. Landlords must respond within 28 days or consent is automatically deemed given. Assignment procedures for retail leases are strictly regulated and must be followed precisely to avoid serious consequences.

Can lease terms be changed after signing?

Leases are legally binding contracts. Once signed, changes require agreement from both parties and should be documented in writing through a formal variation deed or lease amendment. This is why it’s essential to have your lease reviewed by an experienced professional before signing, not after. During negotiations before signing, all terms can be amended, but once executed, you’re committed to those terms for the lease duration. The only exception is statutory rights (like retail tenant protections) which cannot be overridden by lease provisions.

What causes most lease disputes in NSW?

Common dispute causes include: undisclosed or unexpected outgoings (one of the most frequent issues), rent increase disputes and market rent determinations, lease renewal disagreements, breaches by either party, landlord work disrupting tenant operations without proper compensation, failure to pay agreed rent or outgoings, and make good disputes when tenants vacate (one of the most common bond disputes). Many disputes arise from ambiguous lease terms or misunderstandings about obligations. Having clear, well-drafted lease terms and getting expert advice early can prevent most disputes before they escalate to mediation or tribunal.

Why use a conveyancer with law firm experience for leases?

Commercial and retail leases are governed by complex state-specific legislation that differs significantly from standard conveyancing work. Your lease directly affects your business operations and can determine success or failure. Our team means we understand the commercial implications of lease clauses, can identify unfavourable terms that others miss, know the nuances of the Retail Leases Act’s mandatory protections, understand the complexities of commercial lease negotiations, and can negotiate effectively on your behalf. Once a lease is signed, it’s legally binding, so expert advice before signing is essential. The cost of expert review is minimal compared to the financial risks of poorly negotiated lease terms.

What’s the difference between lease registration requirements for retail vs commercial leases?

For retail leases exceeding 3 years (including option periods), registration is mandatory within 3 months of the tenant returning the signed lease to the landlord. Landlords face criminal penalties (up to 50 penalty units) for non-compliance. For commercial leases exceeding 3 years, registration is not legally mandatory (no criminal penalties), but is strongly recommended because unregistered leases don’t automatically pass with the land if the property is sold or the mortgagee exercises rights. In both cases, registration protects the tenant’s rights and provides certainty. The 3-month timeframe starts when the tenant returns the executed lease, not from the execution date.