Drafting Retail Leases

>>Drafting Retail Leases
Drafting Retail Leases2020-01-15T17:55:57+11:00

Ensure that you are aware of all your rights and obligations by obtaining legal advice from expert retail lease lawyers.

A retail lease is an important commercial contract for any business, and its terms often bind a tenant for several years. It is therefore imperative to ensure that tenants have their retail lease reviewed by an experienced legal advisor.

Retail Lease Review

The following are important things that must be reviewed before entering into a commercial lease:

  1. How much rent is payable under the lease;
  2. Is there any rent-free period, or some other lease incentive, and is this documented;
  3. How long is the lease term;
  4. Is there an option period to extend the lease;
  5. What may the premises be used for;
  6. Can the premises be subleased;
  7. Will rent increase, and how will this be calculated;
  8. Are there any make good requirements on termination;
  9. Will the tenant be required to provide a bank guarantee or personal guarantee (it is best to avoid a personal guarantee if possible);
  10. Whether there any requirements in the specific state or territory that the tenant needs to be aware of.

Retail lease legislation usually imposes obligations on landlords to provide a prospective tenant with a disclosure statement which summarises the commercial terms of the lease. This should be provided to the tenant at least seven days before entering into the lease. The statement will summarise all the commercial terms of the lease and provides information about the shopping centre and the costs that will be payable under the lease.

Hiring a legal professional to review a lease as well as the landlord’s disclosure statement is the best way tenants can protect themselves from any onerous or unusual lease terms.


After the review of the lease, it is time for the tenant’s solicitor to negotiate with the landlord to ensure that the parties lay the foundation of a good relationship between the parties from the beginning. A well-negotiated lease also reduces the potential for disputes in future as well as possibly adding value to a business.

The following are the most common terms that are negotiated between a new tenant and landlord:

  1. Amount of rent;
  2. Which outgoings are payable by the tenant, and in what proportion;
  3. Options for further lease terms;
  4. Any special conditions, such as renovation or refurbishment obligations, due diligence periods, and legal costs.

Ensure that you are aware of all your rights and obligations by obtaining legal advice from experts in retail leases. To talk to our experienced retail lease lawyers, call us on (02) 4929 7002, or email us at enquiries@butlers.net.au.




Related Articles

