Commercial Lease Lawyers in Melbourne

A business lease affects more than the rent. It sets out who pays for repairs, whether you can transfer the lease when you sell your business, and what you have to do when you leave.

Hendersons Legal drafts and reviews commercial and retail leases for small and medium sized businesses and private landlords across Victoria. Our commercial leasing lawyers in Melbourne explain what you are signing up to and help you negotiate terms that suit your plans.

Call (03) 9629 2211 or complete our online enquiry form to discuss your lease.

Commercial lease review for tenants

The agent may describe the lease as standard, but that doesn’t mean its terms suit your business. Repairs, rent reviews and make good obligations can make a big difference to what you end up paying.

We review the lease and the documents that come with it, including any disclosure statement, plans and offer to lease. You get a written summary of the rent and other costs, your responsibilities, the dates that matter and the terms we recommend negotiating. We also point out costs that may change or can’t be worked out yet. If you would like us to negotiate changes, we deal with the landlord or their representative for you.

Send us the documents before you sign the lease or an offer to lease. An offer or heads of agreement can be binding, depending on its terms and the circumstances. For a retail lease, taking possession with the landlord’s consent or starting to pay rent can also mean the lease has been entered into before anyone signs.

If the tenant is a company, the landlord may ask the directors for personal guarantees. A guarantee can expose your personal assets if the company doesn’t meet its obligations. We check what the guarantee covers, whether it extends to renewals and whether its scope can be negotiated.

Commercial lease drafting for landlords in Victoria

A well drafted lease reflects the property, the deal you have agreed and how the tenant will use the premises. We prepare commercial and retail leases that deal properly with rent reviews, recoverable outgoings, security, repairs, make good and what happens if the tenant defaults.

Where the Retail Leases Act applies, we prepare the disclosure statement required by the Retail Leases Regulations 2023 and advise on the documents and notices you must give. The proposed lease and the Victorian Small Business Commission’s information brochure must be supplied when negotiations begin. For a new retail lease, the disclosure statement and the completed proposed lease must also be given at least 14 days before the lease is entered into.

Missing these steps can delay the start of the lease, or give the tenant a right to withhold rent or terminate, depending on the breach and the notice requirements in the Act.

We also prepare variations, extensions, renewals, assignments and surrenders, including any disclosure documents the particular transaction needs.

Retail lease or commercial lease?

Before we draft or review a Victorian business lease, we check whether the Retail Leases Act 2003 applies. It generally covers premises used, or to be used under the lease, wholly or predominantly for selling or hiring goods by retail or providing services on a retail basis.

That reaches well beyond shops, cafes and restaurants. Clinics, consulting offices and some warehouse or industrial premises can qualify, and supplying goods or services to other businesses doesn’t automatically put a lease outside the Act.

There are exclusions, including certain listed corporations and their subsidiaries, premises with annual occupancy costs of more than $1 million (excluding GST), and premises covered by particular Ministerial determinations. The occupancy cost test isn’t based on rent alone.

Where the Act applies, it overrides lease terms that are inconsistent with it. For example:

• For a new retail lease, the landlord must provide the disclosure statement and proposed lease at least 14 days before the lease is entered into.
• An initial lease generally has to run for at least five years, counting any renewal options granted at the start. There are exceptions, including where the tenant obtains a waiver certificate from the Victorian Small Business Commission and gives the landlord a copy.
• The landlord can’t recover its costs of negotiating, preparing or executing the lease from the tenant.
• The landlord can’t pass on its land tax or commercial and industrial property tax.
• A market rent review can’t stop the rent from going down.
• Money paid as a security deposit must be held in an interest-bearing account. If the tenant has met all its obligations under the lease, the deposit and interest must be repaid within 30 days after the lease ends.
• Before a retail tenancy dispute can go to VCAT, the Victorian Small Business Commission generally has to certify that mediation or another dispute resolution process has failed or is unlikely to work. Applications for an injunction are an exception.

If the Act doesn’t apply, the lease terms carry more weight, although other laws can still affect each side’s rights. The way a property is described doesn’t settle the question on its own.

What we check in a commercial lease

Our commercial lease review covers the terms that affect your costs, how you can use the premises and your ability to change plans:

• Rent and rent reviews, including what happens during option periods
• Outgoings, how your share is worked out and which charges can lawfully be recovered
• Renewal options, notice requirements and deadlines
• Permitted use, and any planning or licensing restrictions
• Repairs and maintenance, including the structure, equipment and essential safety measures
• Make good obligations, and the condition of the premises at the start
• Bank guarantees, security deposits and personal guarantees
• Assignment and subletting, including what happens if you sell the business
• Relocation, demolition and redevelopment clauses
• Insurance, indemnities and releases
• Default, termination and interest on overdue payments
• GST, rent-free periods, fit-out contributions and any obligation to repay incentives

Renewals, assignments and moving out

Selling a business often means transferring the lease to the buyer. We advise outgoing and incoming tenants on the landlord’s consent, the disclosure requirements and any liability that continues after the transfer. We can also handle the legal work on the sale or purchase of the business itself.

If you want to renew, talk to us well before the option deadline, because missing it can put your right to stay at risk. For retail leases, the landlord’s notice obligations and any early market rent review can affect that deadline. We check the dates that apply and explain how to exercise the option.

When you move out, the lease may require repairs, removal of your fit-out or reinstatement of the premises. We advise on these make good obligations and on getting your security back. A condition report prepared at the start makes disagreements about what work is needed much easier to resolve.

Who we act for

We act for small and medium sized businesses and private landlords in Melbourne and regional Victoria. Our leasing work includes shops, cafes and restaurants, offices and consulting suites, warehouses and factories, and premises leased as part of buying a business.

Whether you are taking on your first premises, moving somewhere bigger or leasing out a property you own, we can help you understand the terms before you commit.

Why Hendersons Legal

We look at the commercial picture

We have advised Victorian businesses since 2001. We look at how a lease will affect your cash flow and your plans for the business or the property, including whether you can renew, transfer the lease or adapt if your circumstances change.

Advice in plain English

You get a written explanation of the terms that matter, with practical recommendations on what to negotiate and what to keep an eye on.

Costs explained up front

Before we start, we explain the scope of the work and give you a costs agreement setting out how our charges are calculated.

Handled online

We work digitally, by email and phone, so you can send us your documents from anywhere in Victoria.

Frequently asked questions

How it works

1. Call (03) 9629 2211 or complete our online enquiry form. Tell us whether you are the tenant or the landlord, and whether there is a signing or option deadline.
2. We let you know which documents to send, confirm the scope of the work and give you a costs agreement. We also explain the identity check we need to complete before we start.
3. We review or draft the lease. Tenants receive a written summary and recommendations. Landlords receive a draft lease and any disclosure documents included in the agreed scope.
4. If negotiation is part of the agreed scope, we deal with the other side or their representative and help finalise the documents for signing.