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A commercial lease is an agreement that provides a tenant with premises for commercial use. There is often a huge power disparity between the average small business and the landlord, as the landlord is often a very large business. Being locked into a lease with unfavourable terms for your business can have significant financial ramifications, which is why you should always make sure a leasing lawyer reviews and signs off on the lease. A leasing lawyer can help in every stage of the negotiations and can end up saving you time and money down the track.

Here are the key terms to look out for when you are signing that next commercial lease:

Subject matter of the lease

The description of the part of the property you will be leasing is of significant importance. The lease should clearly specify the part of the property being provided to your business, including the dimensions of the area. If you are leasing part of a building that has common areas, such as stairs, lifts, driveways, and garbage disposal points, your lease should clearly outline each party’s responsibilities and obligations under the lease and in respect of these areas. Certain matters, like where your customers and employees will park, can be easily overlooked. If your business requires parking, you should make sure the number of spaces you need is clearly stated within the lease or a collateral agreement.

Use of the premises

Most commercial leases will have a clause that describes the permitted use of the premises. You should be clear on what business you intend to carry out in the premises and make sure this matches with what the lease allows you to do. It is important to check the zoning of the premises. You should also be aware of any other restrictions on the premises, including hours of access. Where there are adjoining commercial tenants, you may be prohibited from making renovations during trading hours. In addition, most shopping centres will prohibit the use of power tools during business hours. These are important considerations during the initial negotiation period of your lease and should be discussed with your leasing lawyer.

The key dates of the commercial lease

There a number of key dates your business should be paying particular attention to. The handover date refers to when the premises will be provided to your business. During this time, you will be allowed to make certain fit-outs to your premises to make sure you’re ready for business. Importantly, the tenant does not usually pay rent during this period. Not surprisingly, the lease commencement date is the date when a lease will commence. On this date, the business will be required to be ready to trade and pay rent. It is important to make sure you have been given a sufficient period of time between handover and commencement to make all the necessary changes to the premises. With the help of your leasing lawyer, you may even be able to negotiate a rent-free period.

The outgoings of the premises

When entering into a commercial lease, it is important to understand that there are other costs outside the standard rent payments that your business may have to pay. Outgoings are the costs associated with the maintenance of the premises. They include council rates, water rates, land tax, insurance premiums, repairs, cleaning, and promotional funds for marketing purposes. It is important to speak to an expert leasing lawyer to get estimates of these costs so that your business can budget accordingly.

Options for renewal

Commercial leases vary in length but always prescribe a time period for expiry. It is also common for leases to have an option to renew at the end of the lease. Your leasing lawyer should bring to your attention the date of the last day for exercising this option and what requirements your business has to meet.


When you are negotiating your next lease, make sure you carefully go through these details with your leasing lawyer. If you would like a fixed-fee quote for a review or drafting of the commercial lease, contact LegalVision on 1300 544 755 to connect with one of our experienced commercial leasing lawyers.


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