02/07/2026
The 3 hidden traps in commercial property leases. 👇
A commercial lease is a major milestone for any business, but it’s also one of the biggest financial commitments you will make.
Unlike residential leases, commercial agreements are heavily weighted in favour of the landlord - and the true costs are often buried deep in the fine print.
Before you sign on the dotted line, make sure you audit your agreement for these 3 silent cash drains:
📈 1. Compounding Rent Spikes
A 3% or 4% fixed annual increase sounds harmless initially. However, because it compounds year-over-year, your rent increases exponentially. If your revenue doesn't outpace that compounding curve, the lease can quickly become unsustainable before the term is up.
🧾 2. The Outgoings Trap
Never assume your base rent is all you will pay. In a "Net Lease," landlords can legally pass on their operational building expenses directly to the tenant. If you aren't careful, you could be hit with unexpected invoices for the landlord's land tax, local council rates, and building insurance. Always negotiate a cap on these expenses.
🔨 3. The "Make-Good" Clause
This is often the most expensive surprise at the end of a tenancy. A standard make-good clause can legally compel you to completely demolish your fit-out, strip the space back to bare concrete, and return it to its exact original condition when you move out. This process can easily cost upwards of $20,000+ in unexpected structural and labor costs.
⚖️ Protect Your Business Cash Flow
The cost of having a commercial lease professionally reviewed before you sign is a fraction of the cost of falling into just one of these hidden traps.
If you are currently negotiating a new space or preparing to renew an existing lease, let our team look over the paperwork to protect your bottom line.
📲 Send us a DM or call to get in touch today to book a commercial lease review with the team at TY Lawyers.
