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Understanding Your Obligations Before Signing a Commercial Lease

Signing a commercial lease comes with more responsibilities than just paying rent. Overlooking key obligations can lead to unexpected costs and disputes. A well-structured lease agreement will outline these responsibilities, but tenants should carefully review and clarify any terms before signing.

Financial Responsibilities

Commercial tenants are typically responsible for more than just the base rent. Additional costs may include:

  • Outgoings, such as council rates, insurance, and property management fees
  • Utility charges, including electricity, water, and gas
  • Maintenance and repairs, which often cover internal upkeep and HVAC servicing

Understanding these costs before committing to a lease is essential. Requesting a clear breakdown of all expected outgoings can help avoid financial surprises.

Lease Renewal and Market Review

Lease agreements often include clauses for rent reviews and renewal terms. These may be tied to market conditions or set at fixed intervals. Checking the schedule of the lease ensures commercial tenants are aware of when rent reviews occur and provides an opportunity to negotiate terms in advance.

Dispute Resolution and Compliance

Disputes may arise over maintenance responsibilities, rent adjustments, or other lease terms. Tenants can seek resolution through:

  • VCAT, which handles some commercial lease disputes but has jurisdictional limitations
  • The Victorian Small Business Commission, which offers mediation services

Clear communication with the landlord and a thorough understanding of commercial lease obligations can help prevent disputes from escalating.

Need guidance as a commercial tenant on your lease responsibilities? Explore our FAQ’s or Contact us for expert advice on navigating your commercial lease with confidence.

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