Everything You Need To Know About Your New Commercial Lease

Congratulations on your new commercial lease! Now, the hard work begins of navigating through all the legalities and paperwork that come with leasing a commercial property. This can be an overwhelming process so we’ve compiled some key facts you need to know about commercial leases. Get ready for the next step by reading these important guidelines.

    Everything You Need To Know About Your New Commercial Lease

    Location/Zoning Location is key for any commercial premises

    An industrial premise or office block should consider transport needs of employees. This may mean having a car park or being near a transport hub. A retail or hospitality outlet needs to be where potential customers will pass by, and visit! A professional Real Estate agency will discuss local planning laws with you. Zoning regulations may allow your current operation but you must consider whether growth of your organisation may lead you to add additional services or a retail outlet.

    Length of the lease

    Make sure the ‘term’, or duration, of the lease matches your expected future business needs. You have long-term plans and business growth may mean you need additional, or new, premises. Another important consideration is the impact of you moving your business before the contracted end of your lease. Changes to your market (including a global pandemic!) might require you to relocate. There may be a penalty clause written into the lease to cover this or you may be able to pass the lease to another business. If so, your real estate agent will discuss the requirements with you.


    The premises probably won’t have the fixtures your business needs to operate. The lease should identify who is responsible for fit-out of the premises. You must also understand who is responsible for refurbishment of the premises when the lease ends.

    Everything You Need To Know About Your New Commercial Lease


    You would expect the landlord to be responsible for structural repairs. Ensure there is a process in place for notification of repairs work needed. You need to know who to contact, especially for out of hours emergencies. The tenant should expect to take care of day to day maintenance. This includes cleaning of your rented space and minor repairs. If your lease covers part of a building then your real estate agent will clarify who is responsible for maintenance and cleaning of shared areas. This will include areas such as toilets and lifts, lobbies and windows.

    Rent reviews

    New South Wales has no regulations specifying the rate of rent increases for commercial properties. Legally, however, your lease must identify when, and how, the rent will be reviewed. There are several methods of calculating rent increases, including an agreed fixed percentage, using the current rate of inflation (or CPI) and a market review. Note that a market review can reveal that the rent is higher than the market rate. Your lease may call out whether this would lead to a decrease in your rent.

    Security Bond

    There is no legal mandate for a commercial lease to include a bond. Most commercial leases will detail a bond agreement. The value of the bond and where the funds will be deposited will be outlined in the lease. The contract should include an agreement on when the landlord will return your bond when the lease ends. The lease will call out the circumstances under which the landlord may withhold a refund of all, or part, of the bond.

    Additional running expenses

    Your lease should call out who is responsible for regular running expenses including council and land tax. Seek clarification on utilities such as power and water and wifi/internet access.

    GST and Stamp duty

    GST payable will depend on the premises and their usage. Your real estate agent will explain your tax responsibilities. Stamp duty is variable and is payable based on the purchase price. Stamp duty may also de payable against the GST!

    The MGM Martin difference

    As a business owner, there’s no question you have lots on your plate. You’re trying to grow your company and keep up with the competition, all while balancing everything else involved your day to day role. To make things easier for everyone involved, MGM Martin will cover these questions ensuring you understand the implications of your commercial lease. As property managers, MGM Martin are there for you when need to chase for those emergency repairs or to provide advice. We are local experts. We will make sure you understand your contracted requirements and potential impacts on your business. We are here to provide you with a stress-free property experience so you can get back to what’s most important – running your business!


    For more information: https://mgmmartin.com/ or call 02 9662 3954