# Commercial Lease Analysis

> Component slug: `dd-leases-commercial`. Researched: `2026-05-18T01:30:00Z`. Sources cited: `16`. Token usage: `~42000`.

## 1. Summary (≤3 sentences)

Commercial lease due diligence (DD) encompasses the systematic review of rent review mechanisms, make-good obligations, options to renew, assignment/subletting rights, exclusivity, outgoings recovery structures, face rent versus effective rent, and security instruments to assess income durability and hidden risk [ref: #127]. In Victoria, the Retail Leases Act 2003 (Vic) (RLA 2003) imposes non-waivable protections on retail tenants including a minimum five-year term, prohibited outgoings (land tax, capital costs), ratchet clause voidance, and controlled assignment consent, materially altering common-law lease terms [ref: #140]. Lease misreading—particularly miscalculating effective rent incentives, overlooking ratchet clauses, or failing to diarise option-exercise deadlines—is a leading cause of commercial DD failure [ref: #143].