Signing Requirements for NSW Commercial Leases

Signing a lease can feel like a “finally!” moment. You’ve found the right premises, negotiated the commercial terms, and you’re ready to get the keys and start trading.

But before you sign, it’s worth slowing down and checking you’re meeting NSW lease signing requirements that small businesses and landlords need to get right. If the lease is signed incorrectly (or by the wrong person, or without proper authority), you can end up with avoidable disputes about whether the lease is enforceable, who is actually bound, and what happens if things go wrong later.

In this guide, we’ll walk you through the practical signing requirements in NSW, including who should sign, how to sign (including e-signatures), what to check before you sign, and the documents that usually sit around the lease.

What Counts As A “Lease” In NSW (And Why Signing Formalities Matter)?

In a small business context, a “lease” is usually the agreement that gives you the right to occupy premises for business purposes in exchange for rent and other payments (like outgoings).

In NSW, you’ll typically see:

• Retail leases (for shops, cafes, many customer-facing premises) which may be regulated by the Retail Leases Act 1994 (NSW).
• Commercial leases (for offices, warehouses, industrial premises, or other non-retail arrangements).
• Licences (sometimes used for pop-ups, shared spaces, or where the arrangement is intended to be more flexible than a lease).

Why does signing matter so much?

• It’s about enforceability: A properly executed lease helps make it clear the parties intended to be legally bound.
• It’s about certainty: If there’s a dispute later (rent, make good, repairs, termination), the signed lease is the starting point.
• It’s about authority: If someone signs without authority (for example, an employee signing for a company without permission), it can create serious headaches.

Even if you’re keen to move fast, it’s almost always worth doing a final “signing check” so you don’t accidentally sign something you can’t comply with (or that doesn’t reflect what you negotiated).

Lease Signing Requirements NSW: Who Needs To Sign And In What Capacity?

One of the most common issues we see is not the content of the lease, but who has signed it (and whether they were entitled to do so).

1) The Correct Legal Entity Must Sign

Make sure the lease is being signed by the entity that will actually operate the business and pay the rent. This could be:

• An individual (if you operate as a sole trader)
• A partnership (often signed by partners in their personal names, depending on structure)
• A company (common for growing businesses)
• A trustee (for example, a company acting as trustee for a family trust)

This detail matters because it affects liability and enforcement. If your company is intended to be the tenant but you personally sign as tenant, you may end up personally on the hook.

2) Company Tenants: How A Company Can Sign

If the tenant (or landlord) is a company, you’ll usually sign either:

• Under section 127 of the Corporations Act (commonly by two directors, or a director and company secretary, or by a sole director if the company has only one director); or
• By an authorised representative (for example, a director authorising someone else to sign).

This is where execution mistakes can happen. If a company signs incorrectly, the other side may later question whether the lease was properly entered into.

From a practical point of view, you also want to ensure the person signing understands what they’re committing the business to (rent, outgoings, repair obligations, bank guarantees, personal guarantees, make good, options to renew, and more).

If you’re unsure who should sign on the company’s behalf, it’s often worth confirming internal authority first (for example, via a directors’ resolution) rather than rushing at the last minute.

3) Signing “On Behalf Of” Someone Else

Sometimes a lease is signed by someone acting for another person or entity (for example, an assistant signing for a director, or a property manager signing for the landlord).

When someone signs on behalf of another party, it’s important to be clear that they are signing as an authorised signatory rather than in their personal capacity. This is one of those small details that can prevent big disputes later.

It can also help to use an appropriate signing format, such as a p.p. signature, where appropriate, to show the signatory is acting on another person’s instruction and authority.

4) Guarantors Also Need To Sign (If A Guarantee Is Required)

In NSW leasing, it’s common for landlords to request a personal guarantee (especially for small businesses, new businesses, or where the tenant entity is a company with limited assets).

If a guarantee is required, the guarantor must sign the guarantee document (and sometimes the lease itself). Make sure you understand:

• who the guarantor is
• what obligations they are guaranteeing (often rent and performance of all tenant obligations)
• how long the guarantee lasts (including renewals or extensions)

Guarantees can create significant personal exposure, so it’s worth getting advice before signing.

How Does A Lease Need To Be Signed In NSW (Including Electronic Signing)?

Most leases in NSW are signed in writing and executed as a formal document. The lease itself will usually include an “execution block” showing the signing method expected for each party (individual, company, trustee, etc.).

While NSW and Australian law generally support electronic transactions, the right approach depends on the document type, the parties, and the practical realities (including whether the lease must later be registered, and whether the landlord’s processes require wet ink signing).

Wet Ink Vs Electronic Signatures

Many commercial documents can be signed electronically, but you should be cautious and confirm the signing method is acceptable for your lease and the parties involved. In some situations, a party (or a registry/process) may still require wet ink execution, so it’s best to confirm this upfront to avoid delays to your start date.

If you’re weighing up electronic signatures, it can help to understand the difference between wet ink signatures and electronic signatures and what each method means for evidence and enforceability.

Counterparts: Do All Parties Need To Sign The Same Physical Document?

Often, leases are signed in “counterparts”, meaning each party signs their own copy and together they form one agreement.

This is a common and practical approach, especially when parties are in different locations. But it only works smoothly if the lease includes a counterparts clause and the signing process is consistent.

It can be helpful to understand what it means to be signed in counterpart, especially if you’re exchanging PDFs by email and trying to meet a tight handover deadline.

Witnessing: Is A Witness Required?

For many business leases, a witness is not automatically required just because it’s a lease. However, witnessing requirements can come up depending on:

• the type of document (for example, if the lease or a related document is a deed)
• how the document is being executed (including any specific requirements set out in the lease)
• whether there are guarantors (and the form of guarantee being used)
• internal policies (some landlords require witnessing as a risk-control step)

If witnessing is required, make sure the witness meets any stated requirements and signs correctly. If you’re unsure about the basics, it’s useful to understand the general witness signature rules and when they typically apply.

What To Check Before You Sign A Lease In NSW (From A Small Business Perspective)

If you’re about to sign, it’s a good time to treat the lease like a risk checklist. The lease will usually run for years, and it often has bigger financial impact than many other contracts you’ll sign in your business.

Here are the key items we recommend checking before you sign.

1) The Parties And Premises Details

• Is the tenant name correct (company name, ACN/ABN, trustee capacity if applicable)?
• Is the landlord name correct?
• Is the premises description accurate (suite number, floor, plan, storage areas, car spaces)?

Small errors can cause big confusion later (especially if you need to enforce rights around storage, signage, access, or exclusive use).

2) Term, Options, And Critical Dates

• Lease term (e.g. 3 years)
• Options to renew (e.g. 1 x 3 years)
• Notice windows for exercising options
• Rent review dates and method (CPI, fixed increase, market review)

Calendar these dates early. Missing an option exercise window can be costly.

3) Rent, Outgoings, And Other Charges

When you budget for a premises, it’s not only about “rent per week”. Make sure you understand:

• base rent and when it’s payable
• outgoings (and what’s included)
• make good obligations (what you must do at the end)
• marketing levies (common in retail centres)
• maintenance and repair responsibilities

If anything is unclear, ask questions before signing. Once you sign, it’s much harder to argue you didn’t understand how the costs work.

4) Permitted Use (What You’re Allowed To Do In The Premises)

Your “permitted use” clause is crucial. It defines what business activities are allowed in the premises.

This matters because:

• you may breach the lease if your actual operations go beyond the permitted use
• it can affect council approvals and licensing
• it can affect your ability to sell the business or assign the lease later

If you think your business might evolve (for example, you may start as takeaway only and later add dine-in), it’s worth ensuring the permitted use is drafted broadly enough to cover your growth plans.

5) Fit-Out, Works, And Incentives

If the landlord is giving you an incentive (rent-free period, fit-out contribution), make sure it’s clearly documented.

Also check:

• who is responsible for approvals
• what you must do before starting work
• who owns fixtures at the end of the term
• timeframes and handover conditions

This is a common area where disputes happen, especially when works run over time or cost more than expected.

Common Signing And Execution Pitfalls (And How To Avoid Them)

Even when both parties agree on the commercial deal, execution mistakes can delay occupancy or create uncertainty later.

Signing Before You’ve Received The Final Version

Sometimes the lease is negotiated in drafts, and then a “clean” final version is circulated for signing.

Before you sign, confirm:

• all negotiated changes have been included
• attachments (plans, schedules, special conditions) are correct and complete
• there are no blank spaces or inconsistent terms

Incorrect Entity Or Capacity

Common examples include:

• signing in your personal name when the tenant should be your company
• a trustee company not knowing it is signing “as trustee”
• mixing up the tenant’s legal name with a trading name

These issues can affect liability and enforceability, so it’s worth checking the “parties” page carefully.

Assuming A Director Or Employee Automatically Has Authority

Within a business, not everyone can bind the company to a lease. You should be clear internally about who is authorised to sign (and ensure the lease is executed in the expected way).

If you need a formal authority document, a simple letter of authority can help show that someone is permitted to act, especially where third parties want comfort that the signatory has permission.

Overlooking “Side” Documents That Need Signing

Leases often come with related documents that also require signatures, such as:

• guarantees
• bank guarantee forms or security deposit arrangements
• direct debit authorities
• fit-out deeds or building rules

Make sure you know what you’re signing and how it links to the lease.

What Other Documents Might You Need Alongside A NSW Lease?

While the lease is the key document for the premises, it’s rarely the only document you need to protect your position.

Depending on whether you’re the tenant or the landlord, and the nature of the premises and arrangement, you may also need:

• Heads of Agreement (HOA): Sometimes used to capture commercial terms before the formal lease is prepared. Be careful here, because some “pre-lease” documents can still have legal effect depending on how they’re written and used.
• Deed of Assignment of Lease: If you’re taking over an existing lease (for example, buying a business and stepping into the premises), you may need a deed of assignment rather than a brand new lease. In NSW, the process and required documents can vary depending on the lease terms and the landlord’s requirements, so it’s worth getting advice early.
• Sublease or Licence Agreement: If you’re allowing another operator to use part of your space (for example, renting out a room or desk), you’ll usually want the arrangement documented properly.

If you’re operating from shared premises, a licence arrangement may be more appropriate than a lease. In that case, a Property Licence Agreement can help clarify boundaries, fees, access rules, and end dates in a way that’s easier to manage than an informal arrangement.

And if you’re taking over a lease or transferring it as part of a broader transaction, it’s worth getting advice on how that transfer interacts with your other documents (like the business sale agreement, restraints, and handover obligations).

Key Takeaways

• Key NSW lease signing requirements for business owners include signing by the correct legal entity, ensuring the right person signs with proper authority, and following the execution method set out in the lease.
• If a company is involved, make sure the lease is executed correctly (for example, under section 127 execution or by an authorised representative), so there’s no doubt the company is bound.
• Electronic signing and counterparts can be practical, but you should confirm the lease allows it and that the signing process is consistent across all parties.
• Before signing, check the essentials: parties and premises details, term and options, rent and outgoings, permitted use, and fit-out/incentive terms.
• Execution mistakes (wrong entity, missing attachments, unclear authority, unsigned guarantees) can cause disputes or delays, even when both sides agree on the deal.
• Leases often sit alongside other documents like guarantees, fit-out documents, and (in shared arrangements) licence agreements, so make sure your paperwork matches your real-world setup.

If you’d like a consultation on NSW lease signing requirements or having your lease reviewed before you sign, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.