What to Include in a Commercial Lease to Avoid Disputes Later
- JLAJLA
- Apr 21
- 2 min read
Intro
Lease signed. Keys handed over. Everything’s running smoothly—until it isn’t. Maybe it’s a fitout issue, a disagreement over outgoings, or tension around the make-good clause.
This post covers the key terms that should be clearly documented in a commercial lease—so landlords, tenants, and agents avoid headaches down the track.
Why It Matters
Commercial leases often start with a great relationship. But if the lease itself doesn’t reflect the deal properly—or leaves key terms vague—misunderstandings can quickly turn into disputes.
A well-drafted lease isn’t just about legal protection. It’s about creating clarity, managing expectations, and giving everyone a reliable framework if things change.
What You Need to Know
Outgoings
Outgoings are one of the most common flashpoints in lease disputes. Your lease should clearly set out:
What outgoings the tenant is responsible for
How those outgoings are calculated and apportioned
How and when they’ll be reviewed or reconciled
What’s excluded (e.g. capital upgrades, legal fees)
| Tip: Include a schedule showing estimated annual outgoings to help tenants understand their exposure upfront.
Make-Good Obligations
Vague or boilerplate make-good clauses can lead to conflict at the end of the lease. Avoid this by being specific:
What condition must the premises be returned in?
Does it include repainting, reinstating floors or removing fitout?
What timeframe is allowed to carry out the work?
If the make-good is negotiated differently (e.g. “as is” or financial compensation), document it clearly.
Fitout and Alterations
Who pays for the fitout? What approvals are required? Who owns the fitout at lease end?
Set out:
What works need landlord approval
Any requirements for building compliance or certificates
Who pays for approvals, consultants, or reinstatement
Rent Review Mechanisms
Make sure rent review clauses are:
Clear and unambiguous
Mathematically workable (especially for percentage or market rent reviews)
Not open to wildly different interpretations
Disputes often arise from inconsistent formulas or review timing.
Use of Premises and Permitted Activities
Describe the permitted use narrowly enough to protect the property—but broad enough to give the tenant flexibility. Be clear about:
What activities are allowed
Whether signage, storage or after-hours access is included
Any restrictions on subleasing or sharing the premises
Commercial Insight
A lease is a commercial deal first and a legal document second. The best leases are the ones that reflect the actual agreement—clearly and practically—so there’s less room for disagreement later.
Think of the lease as the user manual for the tenancy. If it’s unclear, incomplete or out of date, that’s when problems show up.
What to Do Next to Avoid Leasing Disputes
Review your lease template—does it reflect the way deals are actually negotiated?
Clarify terms with schedules, definitions, or annexures where needed
Don’t rely on standard templates for non-standard deals
If you’re an agent, get legal input before finalising Heads of Agreement
A few extra lines now can prevent months of argument later.
Closing Wrap
I work with landlords, agents and tenants to make sure commercial leases are clear, fair, and reflective of the real deal. If you want to avoid disputes down the track, let’s make sure the lease gets it right upfront.
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