Commercial and retail leases

A Commercial Lease is a Contract between a landlord and a tenant for the rental of a commercial property.  It is important to obtain advice and understand any Lease before signing as the Lease Contract defines the rights and responsibilities of each party.  

Terms and options of the lease are set out in the Lease Contract.  There will usually be a clause in the Lease Contract that gives the tenant the opportunity to renew the Lease between three to six months before the end of the Lease.

Rent and rent reviews are negotiated between the landlord and tenant prior to signing the Lease Contract.  The timing and basis for rent reviews must be set out in the Lease for each rent review period.

Outgoing costs such as council rates and water rates, land tax and strata levies may be included in the rent.  However, the Lease Contract must specify which type of outgoings the tenant is liable for.

The bond is usually paid in the form a bank guarantee or cash deposit.  The Lease Contract must specify when the bond will be returned to the tenant after the lease has ended, and under what circumstances the landlord can withhold funds from the bond.

Unless otherwise agreed, tenants generally pay the costs of installing shop fixtures and fittings.  When the Lease Contract has ended, the tenant usually removes the fit-out and returns the property to its original condition (i.e. as it was in prior to the commencement of the Lease).  This is referred to as "make good".  An inventory of the landlord's fixtures and fittings should be annexed to the Lease Contract.