Reading time: 4 minutes

Looking into entering a commercial or retail lease for your new business? Unsure about what you should be checking before you sign the dotted line? Don’t worry; it’s completely normal to have some doubt.

There are a number of things you should consider before signing a commercial or retail lease,

The Term of the Lease and your obligations to pay rent

When you sign a commercial lease, you are financially committing yourself to regular payments over an extended period of time. Paying rent on a weekly or monthly basis is a fundamental term in every commercial or retail lease. As you make monthly or weekly payments, depending on your payment terms, the amount in rent can stack up to be hugely expensive. Upon signing the lease, you are warranting that you can pay this amount every due date for the entirety of the lease term. If your rent is $500 every week for 5 years, you are agreeing to pay at least $130,000 plus any rental increases regardless of how much revenue your business makes.

Late rental payment can result in forfeiture of the property to the landlord. This can happen without notice and can prevent further access to the premises by you as the tenant. During this period, the landlord can continue charging you rent until a new tenant fills the vacancy, which means you may end up paying rent long after you have left the premises if the term of the lease is still current.

In monetary terms, the commitment in a commercial lease is clearly quite significant. By seeking advice from a commercial solicitor or leasing specialist, you’re not only saving time and money, but also relieving yourself of any apprehension or nerves that you may have about the whole process. A leasing lawyer can review the lease and advise you on the terms and conditions being imposed on each party. The importance of having a full and comprehensive understanding of the contents of your commercial or retail lease cannot be underestimated.

Rental considerations

Running a business involves numerous expenses: rent, wages, electricity, stock, supplies, all of which can impede on your ability to pay rent. Before singing a lease, consider what you’ll need financially to manage your obligations and make the business profitable. Ensure your business has reliable financial support. Make a comprehensive business plan or hire someone with expertise who can advise you.

The landlord is under no obligation to reduce the rent just because the business is thriving. The landlord also has no obligation to release you from the lease because the business is failing, you have family commitments, or you are physically or emotionally unfit to work. Sometimes even the best financial advice cannot anticipate unforseen events. If you are having difficulty paying your rent, the first thing to do is contact your landlord and try to negotiate with them. If the landlord is not open to discuss options, contact a commercial lawyer to negotiate on your behalf, or other contact the Office of the NSW Small Business Commissioner.

Permitted Use/ Local Council Consent

Depending on the type of business you intend on running, you may need consent from the local council. Check first before signing your commercial or retail lease.

Speak with the council’s ‘duty planner’ about your plans to renovate the premises. Any fit-outs or other building work may require a lodgement of an application for development consent. Don’t put any faith in the landlord’s knowledge of council regulations, as rules around planning and zoning regularly change. Any attempt to build without first getting council approval can lead to the council stopping you from trading, closing your shopfront and preventing further construction.

If you plan on building, how long will you need to get development approval and complete the work? This period (before trading commences) can be costly, as no income stream exists yet. During this stage, our lawyers will attempt to negotiate a rent-free period on your behalf. Have a think about how you would manage your finances if the development takes longer than anticipated and you’re required to start paying rent.


Stay tuned for part two on what to do before signing a commercial or retail lease. For further legal advice regarding retail or commercial leases, contact LegalVision on 1300 544 755 to speak to a leasing lawyer.


Redundancies and Restructuring: Understanding Your Employer Obligations

Thursday 7 July | 11:00 - 11:45am

If you plan on making a role redundant, it is crucial that you understand your employer obligations. Our free webinar will explain.
Register Now

How to Sponsor Foreign Workers For Your Tech Business

Wednesday 13 July | 11:00 - 11:45am

Need web3 talent for your tech business? Consider sponsoring workers from overseas. Join our free webinar to learn more.
Register Now

Advertising 101: Social Media, Influencers and the Law

Thursday 21 July | 11:00 - 11:45am

Learn how to promote your business on social media without breaking the law. Register for our free webinar today.
Register Now

Structuring for Certainty in Uncertain Times

Tuesday 26 July | 12:00 - 12:45pm

Learn how to structure to weather storm and ensure you can take advantage of the “green shoots” opportunities arising on the other side of a recession.
Register Now

Playing for the Prize: How to Run Trade Promotions

Thursday 28 July | 11:00 - 11:45am

Running a promotion with a prize? Your business has specific trade promotion obligations. Join our free webinar to learn more.
Register Now

Web3 Essentials: Understanding SAFT Agreements

Tuesday 2 August | 11:00 - 11:45am

Learn how SAFT Agreements can help your Web3 business when raising capital. Register today for our free webinar.
Register Now

Understanding Your Annual Franchise Update Obligations

Wednesday 3 August | 11:00 - 11:45am

Franchisors must meet annual reporting obligations each October. Understand your legal requirements by registering for our free webinar today.
Register Now

Legal Essentials for Product Manufacturers

Thursday 11 August | 11:00 - 11:45am

As a product manufacturer, do you know your legal obligations if there is a product recall? Join our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards