Commercial & Retail Leasing

+ What is a commercial lease?

A commercial lease is for commercial property, such as industrial estates and office buildings. A commercial lease will outline the terms of the agreement between landlord and business owner who is renting the space.

It will cover things like rental period, fit-out/refurbishment, repairs and maintenance, rental obligations, insurances and renewal options. It will also include what happens in the event of a lease breach.

Commercial tenants, such as those using the premises for office space, might have particular needs about floor space being contiguous. Or small suites capable of sub-letting.

A commercial tenant might require special security arrangements because of their business needs, such as banking, consular premises, diplomatic premises, high security data centres, or even medical practices.

A tenant’s specific use of the premises may also require special lease terms to be included. Some tenant's industrial uses, for example, might be:

• Hardware with flammable materials
• Manufacturing of food products requiring specific health food preparation areas
• A hardware store chain
• A recycling facility, or has contaminated materials.

There are a range of considerations including Government regulations to consider for each specific usage.

Other tenants might have pad sites for their service station which require specific terms to be included in the leases.

+ What is a retail lease?

A retail lease for retail stores selling goods is governed by its own legislation. In NSW this is the Retail Leases Act 1994. The Act has very set definitions of what is classed as a ‘retail shop’. But it generally covers retail businesses operating in a shopping centre, or a high street for example.

Landlords and tenants have different rights, responsibilities and protection under a retail lease, than what is provided through a commercial lease.

Some tenants, such as liquor stores or bottle shops, require particular terms in their leases to secure their liquor licences or off-premises licence. This may also apply to restaurants and cafes with on-premises licence, and the need to secure their liquor licence.

Assignment of a retail lease under the Retail Leases Act can be complicated, and if the Retail Leases legislation is not followed precisely, this may have disastrous consequences for tenants and landlords.

+ What are lease Heads of Agreement (HoA) or Terms of Lease?

When negotiating a lease for premises, it is important that the agreed terms are written down into a lease Heads of Agreement(HoA). This helps avoid any confusion as to what is agreed and avoids any unnecessary arguments.

The lease Heads of Agreement will contain:

• Details about the landlord (known as the lessor) and the tenant (the lessee)
• The term of the lease
• Options terms
• The rent
• Outgoings
• Rent-free periods
• Use of the premises

And a range of other negotiated lease terms.

To help landlords and tenants we have developed our own Heads of Agreement for you to use.

+ What is an assignment of lease?

A tenant sometimes needs to move premises before their lease expires. Under the terms of most leases, with the landlord’s permission, the tenant can transfer the lease to a new tenant for the rest of the terms of the lease. This is called an assignment of lease.

This can also happen if you sell your business, and the new owner of your business needs to take over the lease. We can help you negotiate your assignment of lease as part of the business sale transaction.

If assignment of a retail lease is needed, there are particular steps to be followed under the Retail Leases Act which we can help you with.

Sometimes the assignment of lease may also require the transfer of special licences, like liquor licences, to the new incoming tenant. We can help with transfers of liquor licences.

+ What leasing services do you offer commercial/retail landlords?

We specialise in drafting tailored commercial and retail leases that protect your business interests, in line with current regulations according to your state.

We have extensive master lease expertise for multi-site operations, retail outlets, liquor stores, shops, office premises, whole buildings and help businesses of all sizes with all leasing matters.

We can help with:

• Preparing and negotiating a lease Heads of Agreement
• Drafting leases
• Lease reviews
• Agreements to Lease
• Lease assignments/transfers
• Disclosure statements for retail leases
• Warranties and insurances obligations
• Compliance with the latest legislation
• Lease negotiation
• Expert legal advice and support in case of leasing issues

Just call our team on (02) 9279 1100 for specialist commercial leasing legal advice. Or complete the enquiry form below and we will come back to you.

+ What leasing services do you offer commercial/retail tenants?

As a business owner your lease is crucial to your business operations and can be the difference between success and failure.

If you are entering into or renewing any kind of lease, it’s essential that you understand the terms and conditions and your legal rights before you sign.

We provide expert help with:

• Reviewing your lease to check it meets the unique requirements of your business, now and in the future (permitted use)
• Reviewing terms of your lease including renewal options, rent reviews and what happens if you sell or wish to change the nature of your business
• Lease negotiation
• Taking over a business lease
• Helping you understand the clauses and implications of your lease
• Terminating a lease
• Legal advice and support in case of any leasing issues

If you have a query about your lease or need a review, contact our team on (02) 9279 1100 or complete the enquiry form below.

+ Why is it important to get a lawyer with experience in commercial/retail leases?

Commercial and retail leases are specific to your business operations, which can be severely affected if your lease is incorrect or does not suit your business.

In addition, commercial and retail leases are governed with state-specific regulations and legislation that affects landlords, tenants and business owners.

So it’s essential that all parties understand their obligations, rights and responsibilities, in particular what happens in the event of a lease breach. Such as not being able to meet rental payment responsibilities.

As experienced commercial and retail leasing lawyers, we will ensure that your rights are protected and your business can operate the way it needs to, drafting, tailoring and negotiating terms in the best interests of your business.

It’s essential to bring in expert legal help if you want to issue or enter into a lease, as once the lease is signed, it is legally binding.

+ Can the terms of a lease be changed?

Yes, during lease negotiations. Leases are a contract, and as with any contract can be negotiated and amended before signing.

You should always get a commercial/retail leasing lawyer to review a lease or Agreement to Lease to check that it works for you well in advance.

+ What are the common causes of lease disputes?

Lease disputes do unfortunately happen. Common causes include:

• Rent increases/disputes
• Lease renewal issues
• Lease breaches by tenant or landlord
• Work undertaken by a landlord that disrupts your business and right to any compensation
• Failure to pay agreed rent/tenant default
• ‘Make good’ issues when a tenant vacates a premises

If you have a leasing issue, contact our team promptly for expert help on (02) 9279 1100 or complete the enquiry form below and we will be in touch.

We will advise you of your legal position and rights. And will help you resolve the issue with the most practical and cost-effective way forward.

+ I am purchasing an office building; can you handle this type of work?

Yes, Justin Betar has successfully transacted office buildings, commercial premises, industrial estates, retail chains, and other ‘heavy hitting’ property transactions. Take a look at our Commercial Conveyancing page for more information about our expertise.

+ Useful links: Commercial and Retail Leasing

For more information on commercial and retail leasing, visit:

• Retail Leasing Act 1994 NSW
• Australian Government: Look Before You Lease guide
• NSW Small Business Commissioner Tenants and Landlords
• Service NSW: Commercial Lease Support