Signing a Commercial Lease? 5 Clauses a Commercial Lease Lawyer Would Watch Out For

Jackie Atchison
Apr 3
2 min read

Leasing commercial space for your business? It’s a big commitment—and often one of the most expensive long-term obligations a business takes on. But too often, lease agreements are signed in a hurry, without proper legal review.

This article covers five common clauses in commercial leases that can cause real problems down the track if you don’t understand them upfront.

Why It Matters

Commercial leases in NSW often run for multiple years and contain terms that may not be clear at first glance. If you miss a critical clause, it could cost you thousands—or restrict how you use the property. Once the lease is signed, your room to negotiate is gone.

That’s why a brief legal review before signing can make a huge difference.

What to Watch For

1. Make Good Obligations At the end of your lease, you may be required to "make good"—that is, return the premises to its original condition. This could include removing fit-out works, repainting, or even replacing flooring. These costs can run into the tens of thousands if you're not prepared.

| Ask for specific wording around what "make good" actually means and whether it can be limited or negotiated upfront.

2. Rent Review Mechanisms Most leases include rent reviews during the term. These might be fixed increases, market reviews, or CPI-linked. If you don't understand the mechanism, you could be hit with unexpected hikes.

| Get clarity on when and how rent will be reviewed—and whether it’s capped.

3. Outgoings Outgoings are expenses the landlord passes on to you—things like council rates, water, insurance, and maintenance. If the lease isn't clear, you could end up paying for unexpected building costs.

| Make sure there's a detailed schedule of what you’re responsible for.

4. Use of Premises This clause limits how you can use the property. If it’s too narrow, it might block you from pivoting your business model—or subleasing.

| Request flexible wording to allow for business growth or change.

5. Termination and Renewal Terms Does the lease auto-renew? Can you exit early? Are there penalties? These details matter—especially if your business hits a rough patch or expands.

| Look for a clear right to renew, and check if there's a break clause.

What to Do Before You Sign - Speak to a Commercial Lease Lawyer

A commercial lease isn’t just another formality—it’s a legal contract that shapes your obligations for years. Even a quick fixed-fee legal review by a lawyer experienced in commercial leasing can help you: