The four things nobody tells you before you sign

Michael Le · 4 September 2026 · 7 minute read · Last updated 4 September 2026

You have found the space. The light is good, the rent seems fair, and the agent is already talking like you have said yes.

This is the part where most people sign whatever is put in front of them and find out what it actually means eighteen months later, usually at the worst possible time, usually on a Friday.

I signed my first lease in 2011, a shopfront in Enmore. Spent about $180,000 getting Great Aunty Three ready, closer to $200,000 once everything was counted. I sold a property, used my savings, took out loans, and my mother put in $20,000 of her own money. It was the first money in, and most of what she had. I opened in August 2012 with nothing left in the tank. No working capital. I found out what that costs you within the first three months, the hard way, like most of us do.

Years later I sat on the other side of the table for three years, managing commercial property for a landlord. Same clauses. Completely different read on them once you have seen how they get written.

1. Your lease term is a bet on who you will be in five years

In NSW, a retail lease has to run for at least six months and can go as long as twenty five years, and that is the Retail Leases Act 1994 talking, not the landlord. Everything in between is entirely up for negotiation. Landlords like long terms because it locks in their income for longer. You should like a term that matches how long it actually takes your kind of business to turn a real profit, plus enough room to breathe once it does.

Nobody hands you this advice for free, because the person handing you the lease is the one who benefits from you signing longer than you need to. Read the term like you are placing a bet on your own future self, because that is exactly what you are doing. Future you would like a say.

2. A personal guarantee can outlive the business by years

Most first time operators do not clock the difference between a bank guarantee and a personal guarantee until it is far too late to matter. A bank guarantee ties up cash, commonly three to six months rent plus GST, sitting with the bank as security. Painful, sure, but it is capped, and it is the business's money doing the sweating.

A personal guarantee is a different animal entirely. You are putting your own name on the line, and if the business folds, that debt does not fold with it. It follows you home. Two real Australian cases make this uncomfortably clear. In Lin v Solomon, a 2017 NSW Court of Appeal decision, a director ended up personally liable for $602,178.35. In NB2 Pty Ltd v P.T. Ltd, decided in 2018, two directors were jointly and severally liable for $3,537,040.50. Those are not cautionary campfire stories. They are actual judgments, with actual people's names on them, people who thought they were just signing paperwork.

If a landlord wants a guarantee, ask which kind, and ask why it cannot be a bank guarantee instead. It costs you nothing to ask. It might cost you everything not to.

3. The make good clause is where good businesses lose money on the way out

This is the clause everyone skims past, because it is about the day you leave, and on day one you are too busy picking paint colours to think about leaving. That is exactly the mistake. Make good obligations can range from fair wear and tear all the way up to full reinstatement, which for a cafe can mean ripping out counters and fixed equipment, making the plumbing and electrical safe, patching every hole you ever drilled, repainting, recarpeting, the lot. Full reinstatement can run into the tens of thousands of dollars, on top of everything you have already spent to get the doors open.

Get an entry condition report done properly when you move in, photos of everything, and try to negotiate a fixed make good figure into the lease itself rather than an open ended obligation you are signing blind on. It is a deeply unglamorous conversation to have on your most excited day. Have it anyway. Future you will thank present you, quietly, from a much less stressful position.

4. On rare occasions, a landlord will help with your fit-out. You will not know unless you ask

Most of the time you are paying for your own fit-out, full stop, no exceptions, no fairy godmother. But every so often, especially when a space has sat empty a while or the landlord wants a tenant who will actually make the place look good, they will offer something back. It might be a few months rent free, it might be a contribution toward the build. One published Australian example set out three months rent free plus a $20,000 contribution on a three year retail lease, but that is one deal that happened once, not a going rate, and plenty of landlords will offer you nothing but a firm handshake.

The point is not the number. It is that these terms exist and they are negotiable, and most first time operators never think to ask because nobody tells them it is even on the table. Landlords are not going to volunteer it out of the goodness of their hearts. Bring it up yourself when you are negotiating, and if you land anything at all, get the exact terms in writing, when it starts, how it is paid, and whether it gets clawed back if you leave early. A verbal yes from an agent is worth exactly nothing the day there is a dispute.

Questions operators ask me about this

Read it like the business plan it actually is

Nobody explained any of this to me in 2011. I found out the hard way, one expensive lesson at a time, the way most of us do, because nobody wants to be the one who ruins the excitement with a lecture about liability.

You do not have to learn it that way. Read the lease like it is the actual business plan, because in every way that matters, it is.