Commercial and retail leases are some of the most consequential contracts a small-business owner ever signs. A typical 5-year retail lease commits you to $500,000+ in rent, plus outgoings (often 30–40% on top of base rent), make-good obligations at exit (often $30,000–$200,000+), and almost always a personal guarantee from the directors.
Get it wrong and the cost is enormous. Each state has Retail Leases Act protections that go some way to balancing the relationship — but the protections only kick in for leases that fall within the Act’s definition of “retail premises”, and the Act doesn’t override most negotiable commercial terms.
The clauses that matter most
- Rent review mechanism — fixed annual increases, CPI, market review, ratchet clauses (rent never goes down even at market review)? Compounding rent increases over a 5-year lease can be the single biggest cost driver.
- Outgoings definition — what’s included? Council rates, water, building insurance, common-area cleaning, security, management fees? Some leases include capital improvements as outgoings — you can end up paying for the landlord’s renovations.
- Make-good obligation — at lease end, what condition must the premises be returned in? “Original handover condition” can mean tens of thousands in restoration work — even if changes were made with the landlord’s consent.
- Permitted use clause — exactly what businesses can be operated from the premises? A narrow definition limits your ability to pivot or sublease.
- Assignment and sublease rights — can you transfer the lease if you sell the business? On what conditions? What landlord approval costs apply?
- Option to renew — do you have one? On what terms? When must you exercise it? Missed deadlines are common and costly.
- Personal guarantee — what’s the scope? Joint and several? For how long after assignment? What dollar cap (if any)?
- Bank guarantee or bond — how much? Returned when? Under what conditions?
- Default and termination — what triggers landlord termination? What cure periods apply? What’s the dispute process?
- Demolition clause — does the landlord have early-termination rights for redevelopment? With what notice and compensation?
Retail Leases Act protection
Each Australian state has a Retail Leases Act that imposes minimum protections for retail tenants — disclosure statements, restrictions on certain unfair clauses, mediation requirements before tribunal proceedings. If your lease falls within the Act’s scope, several otherwise-unenforceable clauses are automatically struck down. Knowing whether your premises qualify is critical.
What Claim Done’s lease review delivers
Upload the lease and any disclosure statement. Within 15 minutes you receive a plain-English A4 PDF report covering every material clause, the financial exposure, whether the Retail Leases Act applies, and recommended negotiation points before signing.
Flat $79. Available 24/7. Take the report to your accountant, your business advisor, or a specialist retail-leasing lawyer for any clauses that need deeper analysis.
For a full legal review
For high-value leases ($1M+ total commitment), unusual structures (turnover rent, anchor tenancy provisions, percentage rent), or particularly long terms (10+ years), engage a specialist Australian retail-leasing lawyer. The Claim Done report shortens their onboarding substantially.