Commercial lease review and advice in Perth

What a basic lease review includes

A basic review is generally document-focused: reading the lease (and any offer to lease and disclosure statement) and identifying the terms and risks that matter to your decision.

• Confirming the correct tenant entity and any proposed guarantors.
• Checking whether retail-shop legislation applies to the premises and use.
• Term, option and notice dates.
• Rent review method and the market-rent process.
• Outgoings and operating costs.
• Permitted use and exclusivity.
• Fit-out, make-good, repair and maintenance obligations.
• Assignment, sublease and sale-of-business provisions.
• Insurance, indemnities and default provisions.

Review only versus negotiation and amendment

A lease review can stop at explanation and a written issues report, or extend to negotiating terms with the landlord, agent or their solicitor and preparing or reviewing amendments. These are different amounts of work, and whether negotiation is included should be confirmed before work starts — not assumed.

• Review only - reading the documents and explaining the material terms and risks.
• Review plus written issues report - a document setting out the material legal and commercial risks identified.
• Review plus negotiation - raising and negotiating changes with the landlord's side.
• Review plus amendments - drafting or settling the wording of agreed changes.

Retail shop lease considerations

Whether a lease is a qualifying retail shop lease under the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) depends on the premises, floor area and nature of the business — not simply the heading on the document. Retail shop leases can carry additional disclosure obligations (such as a landlord's disclosure statement), restrictions on certain costs being passed to the tenant, and other statutory protections. This should be checked before you rely on the document as an ordinary commercial lease.

• Confirm whether the Act applies to your premises and proposed use.
• Review any landlord's disclosure statement against the lease itself.
• Identify costs the Act may restrict a landlord from recovering from a retail tenant.
• Check statutory minimum-term and other protections that may apply.

Personal guarantees and bank guarantees

Landlords commonly require security in addition to rent, most often a personal or director's guarantee, a bank guarantee, or both. These are different obligations with different consequences and should be reviewed together with the lease term.

• A personal or director's guarantee can expose the guarantor beyond the tenant company.
• Understand the guarantee's extent, duration and release conditions before agreeing.
• A bank guarantee ties up the tenant's own banking facility or cash security.
• Check when a guarantee can be called on, and what is required to have it returned or replaced at lease end or on assignment.

• Bank guarantee for a lease →

Options, rent review, outgoings and make-good

Options, rent review, outgoings and make-good are frequently where the real cost of a lease sits, beyond the headline rent.

• Options to renew usually require strict written notice within a defined window, and can depend on the tenant not being in breach - diary the earliest and latest exercise dates at the start of the lease, not near expiry.
• Rent review method (fixed increase, CPI, market review or a combination) affects occupancy cost across the whole term and any option period.
• Outgoings and operating costs should be itemised and, for a retail shop lease, may be subject to statutory disclosure and estimate requirements.
• Make-good obligations require the premises to be returned to a defined condition at the end of the lease - removal of fit-out, reinstatement and repainting can be a significant cost, so the wording should be reviewed before signing, not at expiry.

Fit-out, approvals and permitted use

The permitted-use clause should match what the tenant actually plans to do, including likely product or service changes, and fit-out and approval responsibilities should be clear before work begins.

• Permitted use should be wide enough for the intended business and any reasonably likely changes.
• A landlord's consent to fit-out or use does not necessarily mean a planning or licensing authority will approve it - these should be checked separately.
• Identify who is responsible for base-building works, services and compliance versus tenant fit-out.
• Incentives (rent-free periods, fit-out contributions) should be documented in the lease itself, not left as a separate understanding.

Assignment, sale of business and landlord consent

Most leases allow assignment with the landlord's consent, subject to conditions. If the business depends on the premises, whether the lease can be assigned on workable terms can materially affect a sale of business.

• Review the consent process, information the landlord may require, and any conditions or costs of consent.
• Check whether the outgoing tenant or any guarantor remains liable after assignment (and for how long).
• Confirm whether a company share sale, rather than a change of named tenant, still triggers a consent requirement.
• Coordinate the lease assignment with the business sale contract and settlement timetable.

• Buying or Selling a Business Perth →

Review scope: what a quote typically confirms

Legal Care does not publish fixed prices online. A written, fixed-fee quote follows an initial consultation and states which of the following are included for your matter.

• Initial document review - lease, offer to lease, disclosure statement and related documents.
• Written issues report on material legal and commercial risks.
• Consultation on priorities, risk and negotiation strategy.
• Negotiation with the landlord, agent or landlord's solicitor.
• Reviewing or preparing amendments.
• Retail-shop disclosure statement review, where applicable.
• Advice on personal and bank guarantees.

What to prepare

• The lease, offer to lease or heads of agreement.
• Any disclosure statement provided by the landlord.
• Plans, specifications or fit-out documents.
• The proposed tenant entity (and any guarantor) details.
• Whether you are entering, renewing, assigning or exiting a lease.
• Any option, rent-review or renewal deadline already known.
• Bank-guarantee or personal-guarantee requirements, if known.
• Whether the lease is connected to a proposed business purchase or sale.