FINE PRINT

One-page lease summary

What we are agreeing to

• Fernleigh Bookkeeping Pty Ltd will take a 5-year lease of Suite 4, Level 1, 61 Wattlebird Lane, Bendigo VIC 3550.
• The premises are about 142 square metres, plus a non-exclusive right to use common areas.
• Landlord: Wattlebird Lane Holdings Pty Ltd.
• Guarantor: Priya Raman (Clause 18.1).
• Use is limited to bookkeeping, accounting and associated professional office use only (Item 9, Clause 7.1).
• There is an option for one further 3-year term (Item 3, Clause 3.1).
• The first two months are rent-free for base rent only (Item 11, Clause 4.2).
• The landlord may contribute up to $15,000 + GST towards initial fitout if conditions are met (Item 12, Clause 9.4).

What it costs each year

• Base rent: $48,600 + GST per year, paid monthly in advance as $4,050 + GST (Item 5).
• Rent-free period: no base rent for the first two months, but outgoings, parking and other amounts remain payable (Clause 4.2).
• Outgoings: current estimate of our 18.5% share is $9,200 + GST per year, paid monthly (Item 7, Clause 6.1).
• Parking: 2 allocated spaces at $95 + GST per space per month, so $2,280 + GST per year, reviewed with base rent (Item 10).
• Security: bank guarantee of $13,365, being 3 months’ base rent + GST. This is not an annual payment. It must be provided before commencement and increased after rent reviews (Item 8, Clause 13.1-13.2).
• Rent is reviewed on 1 March each year. CPI reviews cannot decrease the rent (Clause 5.2). The first year of the option term is market rent and cannot fall below the prior rent (Clause 5.3).

Key dates

• 1 March 2027: commencement date (Item 1).
• Before 1 March 2027: bank guarantee must be given (Clause 13.1).
• 31 May 2027: fitout must be completed to receive the landlord’s contribution (Item 12, Clause 9.4).
• 1 March each year: rent review (Item 6, Clause 5.1).
• Option window: notice must be given not earlier than 12 months and not later than 6 months before 28 February 2032, i.e. between 28 February 2031 and 28 August 2031 (Item 4, Clause 3.1-3.2).
• 28 February 2032: initial term ends (Item 2).
• 1 March 2029: earliest date a redevelopment notice can take effect (Clause 14.1).

Our main obligations

• Pay rent, outgoings and parking on time. Unpaid money after 7 days attracts 8% p.a. interest (Clause 4.1, 4.3).
• Maintain and increase the bank guarantee as required (Clause 13.2).
• Use the premises only for the permitted use (Clause 7.1).
• Keep the interior in good repair and repaint it in the final six months (Clause 8.1, 8.2).
• Hold public liability insurance of at least $20 million per event, insurance for fixtures, fittings and stock at full replacement value, and plate glass insurance (Item 13, Clause 12.1).
• Do not make alterations, assign, sublet or part with possession without consent. A change in control is an assignment (Clause 9.1, 11.1, 11.2).
• At the end, remove fixtures and fitout, make good, restore to base building condition and return keys (Clause 10.1).

Three clauses with the most tenant risk

1. Clause 14.1 and 14.2 — Redevelopment

If the landlord intends to demolish or substantially redevelop, it may end the lease with at least 6 months’ notice. No compensation is payable except a refund of prepaid rent.

2. Clause 10.1 and 10.2 — Make good

We must remove our fixtures and fitout and restore the premises at our cost. If we do not, the landlord may do it and recover its costs as a debt.

3. Clause 13.1 and 13.2 — Security

The bank guarantee is unconditional and can be called on if we breach. It must also be increased within 14 days after each rent review.

Calendar dates and deadlines

Before 1 March 2027 — give the unconditional bank guarantee to the landlord — clause 13.1; item 8.

1 March 2027 — commencement date; outgoings, car parking charges and other amounts become payable — item 1; clauses 2.1 and 4.2.

1 March 2027 to 30 April 2027 — rent-free period; no base rent is payable, but outgoings and car parking remain payable — item 11; clause 4.2.

1 May 2027, then 1 day of each month up to 1 February 2032 — pay monthly base rent of $4,050 plus GST in advance — item 5; clauses 4.1 and 4.2.

31 May 2027 — complete the fitout to qualify for the landlord’s fitout contribution — clause 9.4.

31 October 2027 — landlord must give the statement of actual outgoings for the financial year ended 30 June 2027 — clause 6.3.

1 March 2028 — CPI rent review; base rent is reviewed and car parking charges are reviewed with the base rent — item 6; clauses 5.1 and 5.2; item 10.

15 March 2028, being 14 days after the review — increase the bank guarantee so it remains equal to three months’ base rent plus GST — clause 13.2.

31 October 2028 — landlord must give the statement of actual outgoings for the financial year ended 30 June 2028 — clause 6.3.

1 March 2029 — CPI rent review — item 6; clauses 5.1 and 5.2; item 10.

1 March 2029 — earliest date a landlord redevelopment notice may take effect — clause 14.1.

15 March 2029 — increase the bank guarantee after the rent review — clause 13.2.

31 October 2029 — landlord must give the statement of actual outgoings for the financial year ended 30 June 2029 — clause 6.3.

28 February 2030 — end of the first three years of the term; if the lease has ended for tenant default within that period, the fitout contribution must be repaid in full — clause 9.4.

1 March 2030 — CPI rent review — item 6; clauses 5.1 and 5.2; item 10.

15 March 2030 — increase the bank guarantee after the rent review — clause 13.2.

31 October 2030 — landlord must give the statement of actual outgoings for the financial year ended 30 June 2030 — clause 6.3.

28 February 2031 — option exercise window opens; written notice to exercise the option may be given from this date — item 4; clause 3.1.

1 March 2031 — CPI rent review — item 6; clauses 5.1 and 5.2; item 10.

15 March 2031 — increase the bank guarantee after the rent review — clause 13.2.

28 August 2031 — option exercise window closes; last date to give valid written notice to exercise the option — item 4; clauses 3.1 and 3.2.

1 September 2031 to 28 February 2032 — repaint the interior of the premises in the final six months of the term — clause 8.2.

31 October 2031 — landlord must give the statement of actual outgoings for the financial year ended 30 June 2031 — clause 6.3.

28 February 2032 — end of the term; make good, remove fixtures, restore the premises and return all keys and access cards — item 2; clause 10.1.

28 February 2032 — for an option notice to be effective, the tenant must not be in a notified, unrepaired breach at the end of the term — clause 3.1.

If the option is validly exercised: 1 March 2032 — start of the further term — item 3; clause 3.3.

If the option is validly exercised: 28 February 2035 — end of the further term — item 3; clause 3.3.

Dates or deadlines that are not fixed enough for the calendar

Monthly outgoings instalments are payable, but the due dates are not stated — item 7; clause 6.1.

Monthly car parking charges are payable, but the due dates are not stated — item 10.

The landlord’s outgoings statement is due within four months after each financial year, so the dates above are the latest dates; if the statement is given earlier, pay any shortfall within 14 days of receiving the statement — clause 6.3.

The landlord must pay the fitout contribution within 30 days of the last condition in clause 9.4 being met — clause 9.4.

If the landlord gives a market rent review notice for the first year of the further term, the parties must agree within 30 days of that notice — clause 5.3.

If the lease ends for tenant default within the first three years of the term, the fitout contribution must be repaid in full — clause 9.4.

If the tenant holds over after 28 February 2032 with the landlord’s consent, the rent is 10 per cent higher and either party may end the monthly tenancy by one month’s notice; the lease does not state payment due dates — clause 16.1.

Before signing, ask the landlord or our lawyer for written answers. Our lawyer should also check the final wording. One item is missing from the material: the base building condition report referred to in clause 10.1(c) is not included, so we should ask for it.

Term and option

• Can the landlord confirm the exact calendar dates of the option exercise window under item 4 and clause 3.2?
• Is the option under clause 3.1 a tenant right rather than a matter of landlord consent, and is the only condition that the tenant has no notified unremedied breach at the time of notice and at the end of the term?

Rent and reviews

• Will the invoices show zero base rent for the first two months under item 11 and clause 4.2, and will outgoings and car parking still be charged from the commencement date?
• Which CPI source will be used for the annual review under item 6 and clause 5.2, and how will the no-decrease rule be applied?
• If we cannot agree market rent for the first year of the further term, will the landlord give us its valuation basis before the valuer process under clause 5.3 begins?

Outgoings

• Can we see the schedule supporting the current $9,200 estimate under item 7 and clause 6.1?
• What does the “reasonable management fee” include under clause 6.2, and is there a cap?
• Will the landlord provide the actual outgoings statement within four months after the end of the financial year and process shortfalls and overpayments as required by clause 6.3?

Security and guarantee

• Will the landlord confirm the form and due date of the bank guarantee under item 8 and clause 13.1, and confirm its return within 60 days after the tenant has complied at the end under clause 13.3?
• Will the bank guarantee be increased after every rent review under clause 13.2, and will the guarantor be released at the end under clause 18.1?

Use, fitout and make good

• Does the permitted use under item 9 and clause 7.1 allow client visits, contractors and professional office equipment, and is after-hours air-conditioning under clause 7.2 always available on request?
• Can we agree a realistic fitout completion date under clause 9.4(a), and what happens to the item 12 contribution if the fitout is not completed by 31 May 2027?
• Can the landlord provide the base building condition report under clause 10.1(c), and confirm how the make-good and repaint requirements in clauses 8.2 and 10.1 will be managed?

Redevelopment and default

• Can we discuss a longer notice period before the redevelopment notice under clause 14.1 becomes exercisable on 1 March 2029, given no compensation is payable under clause 14.2?
• Are the 7-day interest and 14-day default periods under clauses 4.3 and 15.1 the only late payment consequences, and will the 10% holding-over rent under clause 16.1 remain fixed for the holding-over period?

Costs and notices

• What registration fees are expected under clause 17.1, and will the landlord confirm the notice delivery rules in clause 19.1?