Checklists for lessors and lessees
Checklist for Lessors
- Consider seeking legal and financial advice when preparing a lease document, including to ensure it complies with the relevant legislation.
- Conduct appropriate enquiries to understand the financial capacity of the lessee.
- Provide a copy of this guide as soon as lease negotiations commence.
- Provide full details to the proposed lessee of all outgoings they are agreeing to pay under the lease.
- Consider clarifying who is responsible for the maintenance and repair of particular items (e.g. air conditioning, roof, structural issues).
- Clarify what will happen if there is a breach of lease, and what termination clauses are agreed.
- Provide the lessee with a copy of the lease within three months after it has been signed by the lessor.
- Register a lease longer than three years with NSW Land Registry Services within three months of the lease being signed by both parties.
- Hand over possession of the premises after the lease has been prepared and signed.
Checklist for Lessees
- Look around for a suitable premises and consider talking to other retailers, independent real estate agents, valuers or relevant industry bodies.
- Consider seeking legal and financial advice prior
- to signing a lease. Ensure you read the lease and other lease documents (e.g. Disclosure Statement) thoroughly and highlight any parts which are unclear and seek clarity on these.
- Ensure the property is suitable/appropriate for conducting your business for the duration of the lease.
- Understand what the lease allows you to do (the permitted use) and also what other licenses or permits might be required (e.g. from local council or other authorities).
- Ensure it is clear what the rent is and how it can be increased (if at all) and that this is clearly outlined in the lease.
- Ensure the area to be leased is clearly defined in the lease documents.
- Be aware of any security payments required (e.g. cash bond, third party guarantee, or bank guarantee).
- Note the deadline by which you must exercise an option, if you have one.
- Obtain a copy of the Disclosure Statement at least seven days before you begin a new lease or renew a lease.
- Ensure you fully understand what costs you have agreed to, such as outgoings, fit-out costs and other occupancy costs as well as the make good provisions at the end of the lease.
- Understand who is responsible for maintenance and repairs of the building and infrastructure, plant and equipment, air conditioner etc.
- If the premises is in a shopping centre, make sure you are aware of some of the unique requirements related to renting in a shopping centre.
- Before taking possession, consider doing an inspection/condition/dilapidation report (including photos) that both the lessor and lessee sign.
- Take possession of the premises after the lease has been prepared and signed.
- Learn about retail leases
- Lease Disclosure Statement
- Information about Disclosure Statements
- Information about lease options
- Everything you need to know about bonds
- How to access the Commission’s mediation services
- Retail leases and COVID-19 FAQs
- Retail Leases Act 1994 (NSW)
If you have further questions, call us on 1300 795 534 or send us an online inquiry.