Commercial lease landlord preparation checklist
Landlord-side lease preparation is about balancing commercial incentives with recovery protections. This checklist walks through the standard steps before issuing a first draft.
This is a 12-step preparation checklist for landlords entering a commercial lease. It covers heads of agreement, tenant due diligence, disclosure obligations, and the key protections a landlord should build into the drafting.
The checklist
Agree heads of agreement
Document the HOA covering rent, term, options, incentives, fit-out, and key conditions.
Conduct tenant due diligence
Obtain trading history, ASIC searches, financials, and references. Confirm any guarantor capacity.
Confirm retail or non-retail
Determine whether the premises fall under state retail leases legislation and the disclosure obligations.
Prepare disclosure statement
If retail, prepare the lessor disclosure statement well ahead of the statutory minimum period.
Draft permitted use
Draft the permitted use tightly to preserve the tenant mix and landlord flexibility.
Set rent review mechanism
Choose the rent review method — CPI, fixed, market — within what the Act allows for retail leases.
Draft outgoings clause
Draft the outgoings clause to capture recoverable costs without breaching statutory exclusions.
Require security
Require a bank guarantee or security deposit of 3-6 months' rent plus GST. Consider personal guarantees.
Draft make-good
Draft a clear make-good obligation covering the condition at lease end — bare shell, base building, or fit-out removal.
Include assignment controls
Draft assignment provisions with reasonable consent criteria, release of outgoing tenant, and financial tests.
Protect redevelopment rights
Include demolition or relocation clauses for long-term assets, with statutory notice periods.
Finalise fit-out plan
Confirm fit-out plans, tenancy delivery conditions, and any landlord contribution schedule.
When this checklist applies
Use this checklist before issuing a first draft on any commercial or retail lease, particularly where the landlord is negotiating an incentive package.
Common pitfalls
- Drafting outgoings that breach state retail leases exclusions
- Missing the disclosure statement deadline for retail leases
- Weak security that does not cover make-good costs
- Vague make-good that becomes a dispute at lease end
- Assignment clauses that cannot operate without unreasonable withholding
Run this checklist on a real matter
Quillio prepares landlord-side leases, disclosure statements, and tenant due diligence summaries. See /practice-areas/commercial-lawyers or start a free trial.
This checklist is a general guide. Retail leases have state-specific requirements — adapt disclosure and recovery clauses accordingly.
Use this checklist on your matter.
Quillio can run this checklist on a specific NSW conveyancing matter — confirm each item, calculate adjustments, and generate the supporting documents. The free trial requires no credit card.
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