The end of the financial year is a natural point for business owners and property investors to pause, review their position, and take stock of what needs attention. Beyond the accounting and tax conversations, it is also one of the best times to review the legal side of your commercial property arrangements: leases, structures, succession planning, and the transactions that have been sitting in the too hard basket.
These five areas are worth a look every year. If you have not reviewed them recently, here is where to start.
1. Review your lease terms
If your commercial lease is within twelve months of expiry, or if an option to renew window is approaching, this is the item to act on first. Option notice periods are strict, and missing the window can mean losing the right to renew entirely.
Equally, if you are operating month to month after a lease has expired, you may have less security than you think. A lease review now gives you time to negotiate from a position of strength rather than under pressure.
Worth confirming while you are in the document: when the option notice period opens and closes, how rent will be reviewed on renewal, and whether any of your options have already been exercised.
One thing that catches people out is the assumption that all commercial leases work the same way. They do not. Whether your lease is classified as retail or commercial changes your disclosure rights, what outgoings a landlord can recover from you, and where you go if there is a dispute. We covered that distinction in detail in Retail vs Commercial Leases: Why the Distinction Matters More Than You Think.
2. Check your business structure
Many business owners set up their operating structure years ago and have never revisited it. If your business has grown, taken on new partners, or moved to larger premises, the structure that made sense at the start may no longer be the right one.
In conjunction with your accountant, this is a good time to consider whether the entity holding your lease or property is still appropriate, and whether any restructuring makes sense before the new financial year begins.
The questions worth putting to your advisers: is the right entity on the lease, does that entity still match how the business actually operates, and would a change create duty or tax consequences that need planning for rather than discovering later.
3. Confirm your Will and succession plan reflect your business
Commercial property is often a significant asset within an estate. If you own business premises, or hold a long term lease with real commercial value, your Will and succession documents should reflect what happens to those assets.
Questions to consider include:
Who takes over the business if you cannot continue?
Does your Will correctly deal with your interest in the property or the lease?
Are your powers of attorney up to date?
These are not comfortable questions, but they are important ones, and they are considerably easier to answer while there is time to plan. For the broader picture on getting these documents right, see Estate Planning: What Every Professional Should Know.
4. Confirm your outgoings position
For tenants operating under leases that require payment of estimated outgoings with an annual reconciliation, the end of the financial year triggers the landlord’s right to reconcile and issue a catch up invoice, or to credit an overpayment.
Review your lease to understand when that reconciliation is due, what documentation you are entitled to receive, and whether the amounts being claimed are consistent with what the lease actually permits.
If you have not received a reconciliation statement in prior years, now is the time to request it. An outgoings position that has gone unreviewed for several years can represent a meaningful sum in either direction.
5. Review any pending property transactions
If you have been considering buying or selling commercial premises, refinancing, or restructuring a property holding, the end of the financial year often creates useful momentum.
Transfer duty, CGT timing, and depreciation entitlements can all be affected by whether a transaction settles before or after 30 June. These decisions should be made with both your accountant and your solicitor involved, ideally with enough lead time to act before the financial year closes.
If the transaction involves a tenanted property, the GST treatment is worth understanding early rather than at settlement. A sale can be GST free where it qualifies as the sale of a going concern, but the requirements are specific and the leases generally need to remain on foot through to completion. We set out how that works in The Going Concern: Selling Real Estate GST Free.
When to do this review
The natural trigger is the lead up to 30 June, which is why these conversations tend to cluster in May and June. That said, four of the five items above are not tied to the financial year at all. Option notice periods run on the lease’s own clock, and a succession plan that no longer reflects your business is out of date the day the business changes, not on 1 July.
The practical approach is to run the full review once a year at a time that suits you, and to diarise the dates that matter as you find them, particularly option windows and reconciliation deadlines.
How we can help
At Gelder Peters Law, we work with commercial property owners, investors, and business operators across the Macarthur region on all of the matters above, from lease reviews and option renewals through to Wills, business succession, and property transactions. You can see the full range of our legal services, or get in touch with our team to talk through where your position sits.
If any of these areas have been on your list, this is the right time to act.
DISCLAIMER: This article provides general information only and does not constitute legal advice. You should seek independent legal advice before acting on any information contained herein. Gelder Peters Law Pty Ltd accepts no liability for any loss or damage arising from reliance on this material.
