Commercial Leasing
New lease,
landlord.
Commercial and retail lease drafting and negotiation for Victorian landlords, aligned with the premises, tenant, transaction and applicable leasing law.
Lease Drafting for Landlords
Lease terms should match the commercial deal.
A commercial lease records the income arrangement, allocation of premises costs, maintenance obligations, security, permitted use, options, assignment rights and the condition in which the premises must be returned. Those terms should reflect the agreed commercial position and the practical characteristics of the property.
We work with landlords to align the lease with the premises, tenant and transaction. For retail premises, the Retail Leases Act 2003 (Vic) may override parts of the document and impose disclosure, outgoings, rent-review and dispute-resolution requirements.
Key Considerations
What every landlord should get right.
The lease should translate the heads of agreement into provisions that can be administered throughout the term. These are the issues that most directly affect rent, risk and control of the premises.
Rent & Outgoings
Clearly structured rent, review mechanisms and outgoings provisions make the payment obligations easier to administer and enforce.
Tenant Covenants
Maintenance, repair, make-good and insurance obligations should define responsibility for the premises during the term and at handback.
Use & Exclusivity
Permitted-use and exclusivity clauses should be consistent with planning controls, the tenant's business and commitments made to other occupiers.
Term & Options
The term, option periods, exercise notices and renewal mechanism should provide a workable timetable for both parties.
Termination Rights
Default, notice, re-entry and termination provisions should be consistent with the lease, property legislation and any retail-leasing restrictions.
Compliance & Disclosure
Retail leases require prescribed disclosure and compliance with the Retail Leases Act 2003 (Vic). The consequence of non-compliance depends on the obligation, timing and circumstances.
Our Services
How we can help.
We advise landlords from heads of agreement and disclosure through negotiation, execution, variations, options, assignment, default and handback.
New Lease Drafting
Drafting commercial and retail leases for landlords, with clear treatment of rent, outgoings, repair obligations, security, options, assignment and end-of-lease requirements.
- Retail & Commercial Leases
- Tailored Drafting
- Special Conditions
- Schedule of Fit-Out
Lease Negotiation
Negotiating rent, term, options, incentives, outgoings, security, permitted use, assignment and make-good against the agreed heads of terms.
- Term & Options
- Rent Structures
- Outgoings Recovery
- Bank Guarantees
Disclosure Statements
Preparing disclosure statements under the Retail Leases Act 2003 (Vic) and checking the required timing and supporting information. A defective or misleading statement can create termination or compensation risk.
- Retail Leases Act 2003 (Vic) Compliance
- Lessor's Disclosure
- Warning Statements
- Estoppel Certificates
Rent Review Mechanisms
Drafting fixed, CPI and market-review mechanisms, including timing, notices, valuation procedure and any statutory restrictions applying to retail premises.
- Fixed Increases
- CPI Reviews
- Market Reviews
- Ratchet Clauses
Lease Enforcement & Disputes
Enforcing your rights when a tenant breaches, unpaid rent, unauthorised use, or failure to maintain. We act on breach notices, recovery proceedings, and lease termination where required.
- Breach Notices
- Rent Recovery
- Lease Termination
- VCAT Proceedings
Assignment & Subletting
Advising on assignment and subletting requests, the proposed occupier, guarantors, consent conditions, documentation and any statutory limits on withholding consent.
- Consent to Assign
- Sublet Approval
- Assignee Vetting
- Director Guarantees
Common Questions
Leasing for landlords, answered.
Commercial and retail leasing is a regulated area with traps for the unwary. These are the questions we hear most often from landlords.
What is the difference between a retail lease and a commercial lease?
A retail lease is governed by the Retail Leases Act 2003 (Vic) where the statutory definition of retail premises is met and no exclusion applies. The Act creates mandatory rules on matters including disclosure, outgoings, rent reviews and dispute resolution. A non-retail commercial lease is governed more heavily by its negotiated terms and general law.
Do I need to provide a disclosure statement?
If the premises are retail premises under the Retail Leases Act 2003 (Vic), the landlord must provide the prescribed disclosure statement within the required timeframe. Late, incomplete or misleading disclosure can affect commencement obligations and may expose the landlord to termination or compensation claims.
What outgoings can I recover from the tenant?
In a non-retail commercial lease, outgoings recovery is largely a matter of negotiation and drafting. For a retail lease, the Retail Leases Act 2003 (Vic) restricts certain recoveries and regulates estimates and reconciliations. We identify which costs can lawfully be passed on and draft the clause and disclosure consistently.
Should I offer an option to renew?
Options to renew give the tenant security of tenure but limit your flexibility. They can also provide certainty of income. Whether to offer an option, and on what terms (market rent review, length, conditions), depends on your investment strategy and the tenant's covenant strength.
What security should I require from the tenant?
Common forms of security include bank guarantees, security deposits, and personal guarantees from directors of a corporate tenant. We advise on the appropriate level and form of security based on the tenant's financial position and the lease value.
Can I refuse consent to an assignment of the lease?
You can refuse consent on reasonable grounds, typically the financial capacity or character of the proposed assignee. However, you must act reasonably and within the time limits set by the lease and any applicable statute, including the Retail Leases Act 2003 (Vic). We manage the consent process to protect your position.
Do I really need a written lease, or is a handshake arrangement enough?
A tenant in occupation without a signed lease may still have enforceable rights, while important matters such as rent reviews, outgoings, make-good and security may remain uncertain. Undocumented tenancies can also complicate lender and purchaser due diligence. Formalising the arrangement provides a clearer basis for administration and enforcement.
What is an agreement for lease and when do I need one?
An agreement for lease is a binding contract to grant a lease once specified conditions are met, commonly used where the premises are still being built or fitted out, where a plan of subdivision must register first, or where landlord works are required. It locks the tenant in before the lease can commence and defines who does what, by when, at whose cost. Done poorly, it leaves the landlord committed while the conditions stay uncertain.
Should incentives be in the lease or a separate deed?
Incentives can be recorded in the lease, a deed or another side document. The key issue is certainty: the document should state what is being provided, when it is earned, what happens if the tenant defaults and whether any repayment is required.
How should make-good be drafted for a landlord?
The clause should state whether the tenant must remove fit-out, repair damage, repaint, reinstate services, comply with base-building requirements or return the premises to a documented condition. A vague make-good clause often turns into an end-of-lease dispute.