Leasing Commercial Property

A lease for your business premises is vital and is usually central to the goodwill, value and future sale of the business. It is a legally binding contract.

Terms and conditions

While leases may be complex and difficult to understand, it’s essential that you do understand the terms and conditions before signing or making a commitment.

A lease may be presented as a standard lease but this does not mean that the terms and conditions cannot be changed by negotiation to suit both tenant and landlord. Leases should be tailored to suit circumstances.

Leasing generally involves the following stages:

  • inspection and research of premises;
  • gathering preliminary documentation;
  • getting advice;
  • negotiating the lease;
  • preparation of final documentation; and
  • fit-out of the premises.

Each of these activities can take a lot of time, so it’s important to factor this into your planning and not underestimate how long it will take to properly deal with each stage.

All documents relating to the lease should be obtained and read, including any assignment documents.

Always keep a copy of every document you have signed.

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Important issues

  • tenants should ensure that all representations and details given, or made, by the landlord or the landlord’s agent are in writing; and
  • inquiries and research should be undertaken in relation to the business, the lease and the property (including comparisons) before making any commitments to buy, lease, take on an assignment or otherwise incur any other obligations.

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Legal and commercial advice

It is strongly recommended that you obtain legal and commercial advice before:

  • signing an offer to lease or any other lease-related document;
  • paying any deposit or other monies; or
  • occupying the leased premises.

If the conditions of the proposed lease are not acceptable and cannot be negotiated satisfactorily, be prepared to walk away.

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Commercial Tenancy (Retail Shops) Agreements Act 1985

View or download the Commercial Tenancy (Retail Shops) Agreements Act 1985 from the website of the State Law Publisher.

In addition to the terms of the lease, many commercial tenancies in Western Australia are regulated by the Commercial Tenancy (Retail Shops) Agreements Act 1985 (the Act). An understanding of this Act is essential.

Under the Act, when a new lease is being considered, a landlord is required to give to the tenant:

  • a disclosure statement;
  • a proposed lease;
  • a Tenant Guide (attached to the lease); and
  • an operating expenses budget.

These documents should be received before any commitment to the lease. If you are considering the assignment of a lease, obtain from the current tenant a copy of these documents, which he or she should have received from the landlord.

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Commercial tenancy forms

These forms, and more information about them can be found on the Commercial Tenancy and Retail Shops section of the Department of Commerce website.

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The Act contains a dispute resolution procedure

In most cases, a retail tenancy dispute will first be considered by the Small Business Commissioner. If the matter can’t be resolved through the Small Business Commissioner, it may be referred to the State Administrative Tribunal (SAT) for determination. A small number of types of matters may proceed directly to the SAT.

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Dispute resolution by the Small Business Commissioner

The Small Business Commissioner has a significant role in the resolution of retail shop lease disputes in Western Australia. The Commissioner’s duties include assisting tenants and landlords to resolve complaints and disputes related to retail tenancies. The Small Business Commissioner can:

  • provide assistance to attempt to resolve the matter; or
  • undertake alternative dispute resolution in respect of the matter.

The Commissioner provides a range of services to help parties resolve a dispute. These include information, advice and guidance, as well as bringing parties together for the purpose of resolving a dispute informally.

If an agreement can't be reached with a guided resolution, mediation may be offered for a more structured negotiation process in which an independent and impartial mediator assists parties to reach an agreement.

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Dispute resolution by the State Administrative Tribunal (SAT)

The SAT in Western Australia deals with a broad range of administrative, commercial and personal matters which include commercial and civil
disputes.

If a lease is subject to the Act, a matter can proceed to the SAT if:

  • the Small Business Commissioner has issued the required certificate; or
  • it is prescribed by the Regulations as being a particular type of matter which can proceed directly to the SAT.

The lodgement fee for an application to the State Administrative Tribunal is currently $70.

For further information contact the State Administrative Tribunal

Use the State Administrative Tribunal Contact Form
This contact form allows you to send comments about SAT services or make general enquiries. Applications and documents relating to existing applications should be delivered or posted to the Tribunal and not sent by email unless the Executive Officer has given prior approval.

Telephone (08) 9219 3111

Address
State Administrative Tribunal
Fourth Floor
12 St Georges Terrace Perth
View Map

Postal address
GPO Box U1991
Perth 6845

Fax (08) 9325 5099

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Commercial tenancy service

The Small Business Development Corporation (SBDC) has commercial tenancy specialist advisors to assist landlords and tenants with commercial lease problems and queries.

Call 13 12 49 to speak to one of our specialist advisers, or make an appointment to discuss your business needs. Alternatively, send an email to info@smallbusiness.wa.gov.au.

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Related Information

Detailed information
Leasing Commercial Premises

Business Guide
Commercial Leases Main Issues

Download free eBooks on leasing

The free eBook guides include:

  • Leasing business premises - a commercial and practical guide
  • Common Questions about the Commercial Tenancy Act booklets
  • Fact sheets for retail shop laws

Contact a specialist commercial tenancy adviser on 13 12 49.

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