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Most business owners focus on three things when they're looking at a commercial lease: the rent, the term, and the location. Those are the decisions that feel strategic. But the clauses that actually determine how much flexibility you have, what your exit costs might be, and how protected your business is over the life of the lease often get far less scrutiny.
A commercial lease is a long-term, legally binding agreement. It's drafted by the landlord's lawyer, reflects the landlord's standard position, and is weighted accordingly. Getting proper advice before you sign isn't about finding problems for the sake of it. It's about understanding what you're actually agreeing to, so you can make an informed decision and negotiate on the things that count.
This post walks through why a commercial leasing lawyer adds genuine value before you sign, what the areas of real complexity are, and what to think about if you're about to take on commercial premises.
A commercial lease is a contract between a tenant and a landlord for the use of commercial premises. Unlike residential leases, commercial leases in NSW aren't governed by prescriptive legislation and the terms vary widely between landlords, buildings, and drafting solicitors. What you sign is largely what you get.
The complexity lies not in any single clause but in how multiple provisions interact over time, and how they interact with your specific business and circumstances. That's where experienced guidance makes the most difference.
Before focusing on the rent, think about how the lease needs to perform over its full term. What happens if your business grows and you need to expand, assign, or sublet? What are your obligations at the end of the term? What options do you have if circumstances change?
These questions shape which clauses matter most to your situation and which provisions are worth spending negotiating capital on.
Commercial leases in NSW sit outside the consumer protections that apply to residential tenancies. There's no standard form, no cooling-off period, and the terms are largely whatever the parties agree to. In practice, that means the landlord's standard form applies unless you negotiate otherwise.
Most tenants read their lease with the current moment in mind: will this work for my business, is the rent acceptable, when does my option start? What's harder to see at the outset is how the lease performs when circumstances change.
Permitted use clauses are a common example. A lease might describe your permitted use narrowly - enough to cover your current offering but too restrictive if your business evolves. A business that starts as a café and wants to add catering or a retail component may find the permitted use doesn't accommodate that. Negotiating with the landlord mid-lease, from a weaker position than you had before signing, is not the outcome most tenants plan for.
Subletting and assignment provisions matter more than many tenants realise. If you need to exit before the end of your term, assigning the lease to a new tenant is often your primary option. Leases that give landlords broad discretion to withhold consent, or that impose conditions making assignment commercially difficult, can leave you carrying rent obligations on a space you're no longer using.
Make-good obligations deserve close attention. Most commercial leases require tenants to return the premises in a specified condition at the end of the term. The scope of that obligation depends heavily on how the clause is drafted, and disputes about make-good costs at the end of a tenancy are common. If you're planning a significant fitout, the interaction between the make-good clause, any landlord contribution to fitout, and who owns the improvements at the end of the lease all need thought before you sign.
This is where AI tools have a genuine limitation. They can retrieve and summarise lease clauses. They can flag provisions that look unusual relative to some template. What they can't do is assess how a specific clause interacts with your particular business, what the landlord's motivations are, what's actually negotiable in the current market, or what a realistic outcome looks like given your circumstances. Reading the document is the starting point. Working out what to do about it requires judgment.
The negotiability of commercial lease terms depends on a number of factors that aren't always obvious from the outside.
Market conditions matter. In a tenant's market, landlords are more willing to negotiate on terms; in a tight market, there's less room to move. Understanding where you sit relative to the landlord's alternatives is relevant to how you approach any negotiation.
The premises matters too. Tenants in multi-tenancy buildings sometimes find that the building's overall arrangement affects their trading conditions in ways that aren't visible in their individual lease. Car parking allocation, hours of operation, and building management rules can sit in documents outside the lease itself.
Rent review mechanisms compound over time. A fixed annual increase sounds modest in year one; applied annually over a five-year term with a five-year option, it produces a very different rent at year ten. Understanding what you're committing to over the full potential term - not just the first year - is material to the commercial decision.
Option exercise processes are administratively unforgiving. Options must typically be exercised within a specific window and in a specific way. Missing the window can mean losing the right, regardless of the length of the tenancy and the quality of the relationship with the landlord. Issues regularly arise around option exercise timing when tenants don't have proper advice in place as the exercise date approaches.
One of the more useful things I bring to a lease review is an understanding of what the landlord is actually protecting with each clause. Landlords include broad make-good obligations and assignment controls for real reasons - they're managing genuine risks around their asset. Understanding that helps identify where there's genuine room to negotiate and where a clause reflects a standard commercial position that's unlikely to move.
It also helps prioritise. A lease review will typically surface a range of observations, and not all of them carry the same commercial weight. A tenant taking a small office on a two-year term has different priorities than a tenant committing to a five-year lease with a significant fitout investment. Knowing which provisions matter most for your specific situation is where experience in commercial leasing advice makes a practical difference.
There's also the question of what to do with the advice. Identifying that an assignment clause is unusually restrictive is the starting point. What matters to you is whether to push back, how to frame that conversation, and what outcome is realistic given the landlord's position and the market. That's a commercial judgment as much as a legal one.
Where tenants take space in buildings that form part of a larger portfolio or are subject to financing arrangements, lease terms can reflect requirements that sit outside the landlord-tenant relationship - lender requirements, body corporate rules, or group-level lease standards. Understanding that context affects what's genuinely negotiable.
Commercial lease review isn't just about reading the document in front of you. It's about reading the lease in context - the building, the landlord, the market, your business, and the full potential term of the commitment you're making.
I've worked with tenants who signed leases that performed well on day one but created real problems at year three, when the business had grown and the permitted use was too narrow to accommodate it. I've also worked with tenants who spent negotiating capital on provisions that, for their particular situation, carried little commercial risk.
The value of proper advice at this stage is that you go into a long-term commitment with clear eyes - knowing what you've agreed to, where your exposure sits, and what options you have if things change.
A professional services business was taking on commercial premises under a five-year lease. The rent was competitive, the location suited the business, and the landlord's agent described the lease as standard. The business owner had read it herself and was comfortable with the rent review mechanism and the option terms.
What she hadn't focused on was the make-good clause, which required her to "reinstate the premises to original condition, fair wear and tear excepted." She had agreed with the landlord to undertake a significant fitout at her own cost. At the end of the term, the question of what that obligation actually required became live.
Reinstate to original condition is a materially more onerous obligation than a clause requiring a tenant to "remove fixtures and fittings and make good." Remove-and-make-good asks the tenant to take out what they installed and patch the fabric of the building. Reinstatement can require the premises to be restored to the state they were in before any work commenced - potentially including structural elements, flooring, and built-in fitout the business had invested significantly in. That distinction wasn't apparent from reading the clause in isolation. It became clear only when the question of what was required actually arose.
Addressing that clause before signing, specifically defining what make-good would require given the planned fitout, would have resolved the question at the point when the tenant had leverage to negotiate it.
A second scenario worth considering involves signage. A business dependent on foot traffic - a café, retail outlet, or professional services firm in a high-footfall location - may find that signage rights are restricted by the building's overall signage policy, body corporate rules, or council requirements that sit entirely outside the lease. A lease that's silent on signage, or that reserves full discretion to the landlord, can leave a tenant with limited or no ability to identify their business from the street. Investigating signage rights before signing, including what approvals are required and what the landlord will agree to in writing , is particularly important for any business where visibility directly drives trade.
When I work with commercial tenants on lease review, the goal is to make sure you understand what you're signing before you commit and to identify the provisions where negotiation is likely to produce a better outcome for your business.
That means reviewing the lease in the context of your specific situation: the fitout you're planning, the term you're committing to, your plans for the space, and the exit scenarios you might need to navigate. It means knowing what's standard in the current market and what's worth pushing back on.
I work with you through the process directly - whether that's a detailed review and written advice, redrafting specific clauses, or handling the negotiation with the landlord's solicitor. The work is done by me, not passed to junior staff, which means the advice reflects actual commercial leasing experience rather than a checklist review.
The most valuable point to get advice is before you sign - that's when you have leverage and options. If you're still at the heads of agreement stage, even better, as some terms are easier to address before they've been formalised into a draft lease.
Advice is also useful if you're considering assigning your lease, if you're about to exercise an option, or if a question has arisen about your obligations under an existing lease. I also work with tenants who are mid-lease and need to understand their rights in a specific situation.
Published by Jackie Atchison, Principal | LexAlia Property & Commercial LawNorthern Beaches, Sydney | Serving NSW for property matters | Australia-wide for business law
Or if you'd prefer, you can send me a message and I'll get back to you promptly.
There's nothing preventing you, but identifying which provisions carry real commercial risk, understanding how they interact, and knowing what's actually negotiable requires practical experience. Proper advice protects the investment you're making in the tenancy.
Standard means it reflects the landlord's standard position, which is designed to protect the landlord's interests. What's genuinely standard in the current market, and what's negotiable, requires someone who works in this area to assess properly.
A make-good clause sets out what you're required to do to the premises at the end of your lease. The language matters: an obligation to reinstate is considerably more onerous than an obligation to remove and make good. Understanding what your specific clause requires before committing to a fitout is worthwhile.
An assignment puts you in the position of the outgoing tenant, including the remaining term and any accrued obligations. You don't get to renegotiate from scratch. A review of the existing lease and assignment deed is important to understand what you're taking on.
The lease is binding from signing. There's no cooling-off period for commercial leases in NSW. Issues that could have been addressed before signing are generally harder and more costly to manage once you're bound by the terms.
