A commercial lease is not a residential one, and most of the protections a tenant might expect do not apply. It is a negotiated commercial contract, and what you sign is what you get.

Before anything: confirm the use is permitted

Check the zoning permits your activity, independently rather than on the agent's word. Check the lease's permitted use clause, which may be narrower than the zoning. And in a sectional title scheme, check the body corporate rules, which can restrict business use entirely.

All three must allow what you intend. Signing first and discovering afterwards is the most expensive version of this mistake, and it happens regularly.

The terms that matter most

  • Term and renewal. How long, and whether you have an option to renew — and at what rent.
  • Escalation. The annual increase. Compounded over five years a high escalation matters more than the starting rent.
  • What is included. Rates, levies, utilities, refuse, security — and what is charged on top of the rent.
  • Deposit and surety. How much, and whether you are being asked to sign personally.
  • Repairs. Who maintains what, particularly roof, plumbing, electrics and air conditioning.
  • Alterations. Whether you may make them, and whether you must reinstate at the end.
  • Early exit. Whether you can, and at what cost.

The clauses that catch people

Personal surety. Extremely common, and it means the company's lease becomes your personal debt. Ask for it to be limited in amount or duration; landlords sometimes agree and almost nobody asks.

Reinstatement. An obligation to return the premises to their original condition can be a substantial cost at the end, particularly if you have fitted the place out.

Operating costs. Charges that fluctuate and are outside your control. Ask what they have actually been over the past two years rather than what they are budgeted at.

Negotiate — most tenants do not

Rent-free periods while you fit out, a contribution to the fit-out, a capped escalation, a shorter initial term with an option to extend. All of these are commonly granted and rarely requested.

Your leverage is highest before you sign and zero afterwards.

Look at the practicalities

Parking, deliveries, access hours, power capacity, water, and internet availability at the address — confirm the last one specifically rather than assuming, because it can take months to install.

Have it reviewed

A lease is usually the largest fixed commitment a small business makes. An hour of an attorney's time against a five-year obligation is inexpensive, and they will find the two clauses you would not have.

General guidance, not legal advice. Commercial leases are binding and consequential; have yours reviewed before signing.