7 essential commercial leasing checks before signing

A useful lease review connects the wording to how you intend to operate. We can help you consider the following issues and decide what needs clarification or negotiation.

1. The parties, premises and permitted use

Check that the tenant and landlord are correctly identified, including the capacity of a company or trustee. Confirm the leased area, storage, parking, access and any shared facilities. The permitted use should fit your activities and realistic plans for the business.

Landlord consent to a use does not itself establish that planning, building or licensing requirements are satisfied. Confirm the approvals relevant to the property with the responsible council and other authorities before committing to a fit-out or opening date.

2. Rent, reviews and total occupancy costs

Look beyond the starting rent. Consider GST, the rent review method, review dates, incentives and when an incentive could be repayable. Ask for the proposed outgoings and how they are calculated, apportioned and reconciled.

Budget for insurance, utilities and other amounts the documents require. Your accountant can help assess affordability; legal advice helps explain which commitments you are being asked to accept.

3. The term, options and important dates

Consider whether the initial term and renewal options suit your investment in the premises. Check the notice window, method of exercising an option and any conditions. Record dates early rather than relying on an informal reminder from the agent.

4. Fit-out, maintenance and repairs

Clarify who supplies and maintains equipment, air conditioning and building services, and how structural work is dealt with. Record the starting condition with photographs and an agreed condition record where possible. Check responsibility for approvals and delays before fit-out work begins.

5. Bonds, guarantees and security

A company tenancy may still involve a personal guarantee. Understand what the guarantee covers, when it can be enforced and whether liability continues after a transfer or renewal. Security bonds and bank guarantees are different arrangements and should be reviewed on their own terms.

6. Assignment, subletting and business changes

If you later sell the business, bring in another operator or need less space, the lease may require consent and supporting documents. Check the transfer provisions before assuming you can pass the lease to a purchaser or sublet part of the premises.

7. Make-good, default and exit obligations

Understand what must be removed, repaired or reinstated when the tenancy ends. Review notice requirements, default provisions, holding over and any relocation or demolition clause. An early exit can involve ongoing obligations unless an effective agreement or legal right brings them to an end.

Renewals, assignments and changes to an existing lease

Renewing your lease

Contact us well before the lease ends or an option notice is due. We can review the existing lease and variations, explain the renewal process and consider proposed changes to rent and other terms. Continuing to occupy premises after expiry is not necessarily the same as securing a further fixed term.

Buying or selling a business with leased premises

The business sale and lease arrangements need to work together. We can consider assignment requirements, landlord consent, proposed security and the documents needed to record the transfer. A departing tenant or guarantor should check whether they are released from future liability.

For the wider transaction, see our commercial advice on business purchases, sales and structures. Where ownership of the property is also being transferred, our conveyancing services may be relevant.

Variations, surrender and lease disputes

Changes to the premises, use, rent or timing should be documented clearly. If you want to leave early, we can review the lease and discuss whether a negotiated surrender, assignment or another option may be available.

If you receive a breach notice or disagree about rent, repairs or make-good, obtain advice promptly and preserve the relevant correspondence. PA Law can assess the documents and discuss negotiation and other available options. See our civil litigation and commercial dispute services for broader dispute assistance.

The Small Business Commission SA leasing resources provide information about leases and available support. The appropriate dispute process depends on the issue and the applicable law.

Commercial leasing FAQs

When should I get a commercial lease reviewed?

Ideally before accepting an offer or signing any preliminary or final document. Early advice gives you an opportunity to understand the obligations and raise changes while terms are still being negotiated. If you have already signed, provide the documents so we can consider your position.

Does the South Australian retail leasing legislation apply to my lease?

It depends on the premises, business use, rent, parties and any exclusion. Some businesses that are not traditional shops may be covered. PA Law can review the arrangement and advise on the relevant framework.

Can you act for both the landlord and the tenant?

The parties may have conflicting interests and need separate advice. Tell us who is involved and which party you represent so we can check whether we can assist before accepting instructions.

Can I negotiate the landlord’s standard lease?

You can ask for changes before committing, although the landlord may not agree. A review can identify terms that matter to your circumstances, such as repairs, rent reviews, security and make-good, so you can prioritise the points to discuss.

Does selling my business automatically transfer the lease?

No. The lease and applicable law need to be checked for consent and assignment requirements. Coordinate the lease arrangements with the sale conditions and settlement, and check the position of any outgoing tenant and guarantor.

Can I leave a commercial lease early?

Closing or relocating your business does not itself end the lease. Available options depend on the documents and circumstances and may involve negotiation, assignment or an agreed surrender. Obtain advice before vacating or stopping payments.

What does commercial leasing advice cost?

Costs depend on the documents, complexity and work required, including whether negotiation or drafting is needed. Contact PA Law with a summary and your deadline so we can discuss scope and costs. No standard price is assumed for every lease.

Do you help clients outside Gawler?

Yes. PA Law assists clients in Adelaide and throughout South Australia as well as Gawler and Evanston South. Contact us to discuss the premises, the advice required and suitable appointment arrangements.