Found the perfect spot for your business? Great, but before you sign that commercial lease, take a closer look at the fine print. From rent reviews to maintenance clauses, every detail in your lease can affect your daily operations and long-term profits.
We’ve compiled a list of 10 essential points that every tenant in Victoria should review before signing a commercial lease. This will help you avoid costly surprises.
10 Things to Check Before Signing a Commercial Lease in Victoria
1. Lease Term and Renewal Options
The first thing to consider in a commercial lease is the term, which indicates the duration of your tenancy. It depends on the lease. The last three years, five years, or even ten years. Ensure the term aligns with your business plan and how you envision it will grow.
Also, find out if there are ways to renew and how the process works. Is it easy to extend the lease? Will the rent go up when it’s time to renew? If you have clear renewal terms, you won’t have to worry about moving or renegotiating at the last minute.
2. Rent, Outgoings, and Increases
Your lease should clearly outline the rent amount, what’s included, and the payment schedule. As for costs that are usually passed on to the renter, such as insurance, cleaning, and repairs, determine what they are.
Check how rent increases are calculated. Is it a fixed percentage, linked to the CPI, or subject to market review? A commercial property conveyancer can review this to ensure the increases are fair and predictable.
3. Permitted Use of the Property
Not every building is right for every type of business. The authorised use clause tells you what kind of business you can run on the property.
For example, if the lease only allows for “office use,” you can’t operate a café or salon there. Always confirm that your business activities comply with local council zoning rules. A lease review service can help you verify this before you commit.
4. Repairs, Maintenance, and Fit-Out Responsibilities
Who pays for what? This is one of the most common disputes between tenants and landlords.
It should be very clear in your commercial lease who is responsible for repairs, maintenance, and upgrades. Check with the owner to determine if you require permission to make changes or set up the space. Also, find out who pays to fix it up when you leave.
A tenant and landlord lease conveyancing expert can help clarify these terms and ensure the responsibilities are balanced fairly.
5. Security Deposit and Bank Guarantees
Before you move in, most owners want a security deposit or a bank guarantee. This protects the owner if you fail to pay or cause damage to the property.
Make sure the lease specifies:
- How much the deposit is (usually 2–3 months’ rent)
- Where it’s held
- When and how it’s returned at the end of the lease
Your conveyancer can confirm that the landlord’s handling of your deposit meets Victorian leasing regulations.
6. Make Good Obligations
The “make good” clause is often overlooked, until the end of the lease. This clause requires you to return the property to its original condition when you vacate.
Depending on what’s written, this could mean repainting, removing fixtures, or even replacing flooring. A conveyancer for commercial lease will carefully review this clause so you don’t face unexpected costs when your lease ends.
7. Subleasing and Assignment Rights
As your business grows (or changes), you may want to sublease part of your space or transfer the lease to another party.
Your lease agreement should specify whether subleasing or assignment is allowed and what approvals are needed. Having this flexibility can protect your business if your circumstances change.
8. Insurance Requirements
Many landlords require tenants to maintain specific types of insurance, such as public liability or contents insurance, to cover potential risks.
Review the mandatory policies and ensure you can meet those obligations. It’s also a good idea to confirm that the landlord has adequate building insurance in place. A conveyancer can review the insurance clauses to ensure there’s no overlap or gap in coverage.
9. Termination and Default Clauses
No one enters a lease expecting things to go wrong, but it’s important to know your rights if they do.
Review how either party can terminate the lease, what counts as a default, and what notice periods apply. This ensures penalties or early termination fees do not blindside you.
Advice from a conveyancing expert can help you negotiate fair exit conditions.
10. Compliance and Disclosure Statements
In Victoria, the Retail Leases Act 2003 provides protection to tenants of retail premises. Before signing, the landlord must provide a Disclosure Statement outlining key terms, such as rent, outgoings, and renewal rights.
Make sure you’ve read and understood this document thoroughly. Your lease review service can verify the accuracy of the information and ensure you’re entering a compliant agreement.
Why a Conveyancer Is Essential for Commercial Leases
A commercial property conveyancer does more than just check paperwork, they protect your business interests. They review lease clauses, explain your rights and obligations in plain English, and flag any terms that could create financial or operational risks.
Having a professional handle your lease review services can save you from costly mistakes and future disputes. They ensure that every part of the agreement aligns with Victorian regulations and your business needs.
Before you sign your next lease, get the confidence that comes from expert guidance. At Eagle Peak Conveyancing, our experienced conveyancing team specialises in commercial lease reviews, helping both tenants and landlords avoid risks and delays. We’ll review your lease terms, highlight potential red flags, and ensure your interests are protected from day one.
Contact us today for a stress-free review of your lease.
Conclusion
In conclusion, a commercial lease is a significant commitment, and every clause is crucial. Taking the time to review your agreement before signing can prevent costly surprises down the line.
From understanding your rent terms to clarifying make-good obligations, the right conveyancer ensures your property transaction is smooth, transparent, and secure.
With professional advice from Eagle Peak and thorough preparation, you can focus on running your business, knowing your lease has been handled right.
Frequently Asked Questions
What's the difference between a retail and non-retail commercial lease in Victoria?
The Retail Leases Act 2003, which governs retail leases in Victoria, provides tenants with greater security by imposing restrictions on specific outgoings and requiring disclosures. Since non-retail business leases (such as those for offices or warehouses) are exempt from the Act, terms may be more lenient, which emphasises the significance of a professional lease evaluation.
Can I negotiate terms in a commercial lease?
Yes. Almost all of the parameters, including fit-out requirements, renewal terms, and rent reviews, are flexible. Before you sign, a commercial property conveyancer can assist you in negotiating more equitable terms and give you an explanation of each clause’s long-term effects.
