Leasing commercial property is one of the most important decisions a business owner will make. Whether you’re opening a café on Darling Street, setting up a retail shop, or running a professional office, the terms of your commercial lease in Rozelle can have a huge impact on your financial stability and long-term success.
Unfortunately, many business owners rush into signing a lease without fully understanding the fine print. This can lead to unexpected costs, restrictions, or disputes with landlords that could have been avoided. The key is to know which clauses matter most and ensure you seek legal advice before committing.
In this guide, we’ll explore the key clauses every Rozelle business owner should carefully check before signing a lease.
1. Rent and Rent Reviews
Rent is usually the first concern for business owners, but it’s not just about the starting figure. Leases often include rent review clauses, which determine how your rent will increase over time. Common methods include:
- Fixed increases – A set percentage or dollar amount each year.
- CPI (Consumer Price Index) – Rent rises in line with inflation.
- Market review – Rent is adjusted to match current market conditions, which can sometimes result in steep increases.
Always clarify when reviews occur and how they’re calculated. In Rozelle’s competitive retail and commercial market, even small increases can significantly affect your bottom line.
2. Lease Term and Options to Renew
The lease term (how long the lease runs) and any renewal options are critical. A short lease may limit business security, while a long lease could lock you in if your circumstances change.
Check:
- The length of the initial term.
- Whether you have options to renew (and how they must be exercised).
- If rent is reviewed upon renewal.
For growing businesses in Rozelle, renewal options provide flexibility and stability.
3. Outgoings and Hidden Costs
Commercial leases often require tenants to pay outgoings in addition to rent. These can include:
- Council rates and land tax.
- Insurance premiums.
- Repairs, maintenance, and cleaning.
- Utility charges.
Always confirm which outgoings you are responsible for. Sometimes landlords pass on more than expected, leading to significant additional costs.
4. Repairs and Maintenance Obligations
One of the most disputed areas in commercial leases is who pays for repairs and maintenance. Some leases make tenants responsible for almost everything, including structural repairs that should be the landlord’s duty.
Look for clauses covering:
- Day-to-day maintenance (air conditioning, plumbing, etc.).
- Fit-out repairs.
- Structural repairs (should usually remain the landlord’s responsibility).
Having these details clearly defined will prevent disputes later.
5. Fit-Out and Make Good Clauses
Most businesses need to customise the premises for their operations, whether it’s fitting out a kitchen, installing shelving, or branding the space. A lease should specify:
- What modifications are allowed.
- Who pays for the fit-out.
- Whether landlord approval is needed.
- Make good obligations – the requirement to return the premises to its original condition at the end of the lease.
Make good clauses can be very costly. Always clarify what’s expected before you sign.
6. Assignment and Subletting
Sometimes your business circumstances change, and you may need to assign (transfer) the lease or sublet part of the premises. The lease should clearly outline:
- Whether assignment or subletting is allowed.
- Conditions or landlord approval requirements.
- Any fees involved.
Flexibility in this area provides an exit strategy if your business needs to relocate or downsize.
7. Use of the Premises
The lease should define the permitted use of the property. This is particularly important in Rozelle, where council zoning and planning restrictions may apply.
For example, if you’re leasing a shop, can you use it for retail, food service, or professional services? If your business expands or pivots in future, will the permitted use clause give you flexibility?
8. Insurance and Liability
Leases often require tenants to hold specific types of insurance, such as:
- Public liability insurance.
- Plate glass insurance.
- Workers’ compensation.
Check:
- What insurance you must provide.
- Who bears responsibility if damage occurs (tenant or landlord).
- Whether the landlord’s insurance covers the building structure.
Properly understanding these clauses protects your business from unexpected liability.
9. Relocation and Demolition Clauses
Some leases allow landlords to relocate tenants within the building or terminate the lease early if the property is being redeveloped. While these clauses are more common in shopping centres, they can appear in other leases too.
If your Rozelle landlord includes such provisions, check:
- Whether they must provide notice.
- Compensation or relocation support.
- The impact on your fit-out and business continuity.
10. Dispute Resolution Clauses
Finally, commercial leases should include a dispute resolution process. This might involve mediation or arbitration before going to court. A clear process helps resolve disagreements quickly and affordably.
Why Legal Advice Matters
Leases are legally binding documents, and once you sign, it can be very difficult (and expensive) to change terms. That’s why every business owner should seek legal advice from a commercial lease solicitor in Sydney before committing.
A solicitor can:
- Review the lease and explain your obligations.
- Negotiate fairer terms with the landlord.
- Ensure compliance with NSW leasing laws.
- Protect your business interests long-term.
Final Thoughts
A commercial lease in Rozelle is more than just a rental agreement—it’s the foundation of your business premises and directly affects your financial stability. By carefully reviewing clauses on rent, renewals, outgoings, repairs, fit-outs, and dispute resolution, you can avoid costly surprises and protect your investment.
Always remember: the landlord’s lease is drafted to protect their interests. To level the playing field, get professional advice before signing. With the right guidance, you can secure a lease that supports your business growth and gives you peace of mind.