Most landlords do not loose sleep over a lease that was signed years ago.
And that is exactly why legacy lease risk is so dangerous.
Because the real damage is often not loud. It is quiet.
By 2026, many landlords are dealing with a harsher operating environment: rent review settings matter more, outgoings recovery needs to be tighter and insurance alignment cannot be treated as an afterthought. In Queensland, outgoings were involved in 22% of QSBC mediations in the 2024-2025 financial year, which shows how often lease cost recovery becomes a live issue.
That is why a proactive lease review matters. Not because it is a legal exercise. Because it is a financial one.
Few lease issues create more friction at the end of a term than make-good.
The Queensland Small Business Commissioner notes that disputes frequently arise because make-good clauses are vague or ambiguous, because there is little evidence of the premises’ starting condition, or because the parties disagree about the required standard of the works. QSBC also notes that the return of the tenant’s bond is almost always affected by a make-good dispute.
That matters for one simple reason:
In Queensland, the default position under the Property Law Act 2023 includes standard lease terms requiring the tenant to return the premises in the same or better condition as at the start of the lease, subject to limits such as reasonable wear and tear and certain insured risks. But the parties can contract out of those standard terms, which means the actual lease wording is critical. For retail shop, a clause requiring refurbishment or refit is void unless the lease includes general details of the nature, extent and timing of that requirement.
That is why landlords should never assume their make-good protection is “probably fine.”
Probably fine is how expensive handback disputes start.
A rent review clause can look harmless when a lease is signed.
Years later, it can be one of the most important financial clauses in the entire document.
In Queensland, lease rent review mechanisms vary, and the QSBC notes that commercial retail leases commonly include annual increases and market reviews. The same guidance also makes clear that under the Retail Shop Leases Act 1994 (Qld), ratchet clauses and dual-method rent reviews are prohibited.
That means the structure needs thought.
Fixed annual increases offer predictability.
CPI=linked reviews can better preserve purchasing power when inflation is elevated.
Market review can help reset rent to market, but they also bring valuation and dispute risk if poorly framed.
There is no one universal answer for every asset.
But there is one universal mistake:
Because if the clause underperforms, the asset underperforms with it.
Quietly.
Year after Year.
A lease should not only work for today’s use of the asset.
It should also leave room for tomorrows decisions.
That is why demolition, redevelopment and relocation rights matter.
When a landlord wants to reposition an asset, consolidate space, improve a tenancy mix or respond to a different highest-and-best-use opportunity, inflexible lease drafting can become a handbrake. Market commentary continues to point to brownfield and urban infill opportunities as part of the current property strategy, particularly in land-constrained sectors.
The commercial lesson is simple.
If the lease does not preserve flexibility, the landlord can end up owning an asset they control less than they thought.
And that can delay strategy, reduce optionality and push value-creating further down the road.
This is one of the most under parts of lease drafting.
Owners often focus on headline rent.
But net income is not protected by headline rent alone.
It is protected by what can actually be recovered, how cleanly it can be recovered, and whether the lease wording matches the insurance and operating cost reality of the building.
QSBC guidance highlights outgoings as a significant area of dispute and Marsh’s Australia propertyinsurance market reporting notes that pricing rose in 2024, with inflation also affecting premiums.
That combination matters.
Because when premiums rise and lease wording is inconsistent, imprecise or outdated, the owner can start absorbing costs they expected to recover.
Not because the asset stopped performing.
Because the paperwork stopped protecting it.
This is particularly important in multi-tenanted assets, where recovery methodologies need to be accurate, consistent and workable in practice.
That is the part many landlords miss.
A lease is not just a legal document sitting in a drawer.
It is a financial control document.
It decides:
When those clauses are weak, outdated or unclear, the landlord often pays in ways that do not show up immediately.
A worthwhile lease review is not about rewriting everything.
It is about pressure-testing the clauses most likely to affect value.
That usually means reviewing:
In Queensland, even apparently straightforward issues such as options, outgoings and make-good have specific statutory and practical implications, which is why landlords should review the actual wording rather than rely on assumptions.
Not because the asset is bad.
Not because the tenant is bad.
Because the lease no longer matches the commercial reality around it.
That is why reviewing key clauses now can do far more than tidy up documentation.
Because when a lease is well built, it does more than record a deal.
It protects the landlord’s future.
Prepared by Annabelle Weir, Head of Commercial Property Management, Ray White Commercial CSR
Last Updated: April 2026
Disclaimer:
The information contained in this article is provided for general information purposes only and is not intended to constitute legal, financial or other professional advice. Whilst every effort has been made to ensure the content is accurate and current at the time of publication, no warranty is given as to its accuracy, completeness or suitability.
This article does not take into account your particular objectives, circumstances or needs. You should not act or refrain from acting on the basis of any content without obtaining independent, tailored advice from a qualified professional. To the maximum extent permitted by law, Ray White Commercial CSR and its officers, employees and agents disclaim all liability for any loss, damage or liability arising from reliance on, or use of, this article or its contents.
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