5 Things to check in your lease now

Posted on Posted in Commercial Property, Commercial Real Estate, Leasing, Women in Business

If you’re the Tenant of a commercial property it’s fairly safe to assume that you pay your rent each month, look after the property and give the real estate agent a call if something isn’t working. Beyond that, there isn’t much else that you worry about.

Do you check invoices you receive from the Landlord before you pay them?

Do you ensure that any rental increases are in line with what’s in the lease? If not, you could be filling the pockets of the Landlord with money that should be yours.


Here are five things that you need to check in your lease now:

  1. Rental Increases. These can vary from lease to lease, with some being CPI, fixed increases, market or even no increase. Don’t assume that whatever increase the Landlord has charged is correct. Check the method of review and your lease and calculate these yourself from the start of your lease. If the amount varies from what you’re currently paying ask the Landlord to rectify this. Click here for more details on how to calculate a CPI rent review.
  2. Lease Option Dates. When you signed your lease you would have signed up for a certain amount of years with further options. These options are for the benefit of the Tenant and usually come with a ‘time is of the essence’ clause. This means that you must notify the Landlord of your intention to exercise your option by a certain date. Failure to do so can leave you with little negotiating power and possibly even result in the Landlord providing you with notice to vacate.
  3. Market Rent Review. Most leases contain a market rent review, usually upon exercise of option. It is important to understand the market rent review provisions, including any allowance for the rent to reduce below what you are currently paying if market rent is less. Make note of when you need to respond to a Landlord’s estimate of market rent and the process for formally objecting and third party rental determination.
  4. Outgoings. I once saved a corporate client half a million dollars by auditing their outgoings. The same as you should be aware of costs within your business, you should check all costs that you are paying as outgoings. You can request copies of invoices paid by the Landlord or have the outgoings statement audited by an independent third party.
  5. Permitted Use. This one may have you scratching your head, but if the permitted use listed in your lease is very precise and any part of your business has changed from this, you could be in breach of your lease. Check that the permitted use noted still fits with the operations of your business and if it is different, seek to have this change approved by the Landlord.


Like any long term business contract, you should continually refer back to your lease document if you have any concerns with payments or maintenance of the property.


Need some help in understanding your lease? Our Lease Summary for existing commercial property leases is just what you need.

We will provide you with a detailed summary outlining your lease option dates, correct calculation of annual rent reviews, details on how the rent is to be reviewed at exercise of option and your permitted use. Contact us info@thetenantcompany.com.au to find out more.