Start with what the tenant will actually do in the space
The permitted use clause is where any dispute about a tenant's activity will eventually get tested, so it needs to describe the real business, not just the industry category. "Warehousing and distribution" covers a very different risk profile depending on whether that means pallets of stationery or a fleet of forklifts running continuously across a concrete slab. Ask the prospective tenant to describe, specifically, what it will do on site day to day, and don't assume the lawfulness of that use is settled just because it fits the lease wording. A permitted use clause and a lawful use are two different questions: the use still has to be allowed under the property's zoning and any relevant planning scheme, and a prohibited use can draw a council enforcement notice that becomes the landlord's problem too, not only the tenant's. If the tenant's plans look like they might need a development approval it doesn't yet have, that is worth resolving before signing, not after.
Ask what's going in before you agree to the fit-out
A fit-out proposal is where the practical risks usually surface first. Find out what services the business actually needs, three-phase power, compressed air lines, dust or fume extraction, and what structural changes it wants, reinforced flooring, racking, crane access or fixed machinery mounts. These are exactly the items that get glossed over in a verbal assurance during negotiations and then become a dispute once the tenant is in occupation. The lease should set a defined consent process: the tenant submits plans, the landlord has a fixed period to respond, and approval of the fit-out doesn't hand the tenant open-ended rights to keep altering the space without coming back for consent each time. It should also say plainly who owns the fit-out and what has to be removed, reinstated or left behind at the end of the term.
Heavy equipment needs its own clause, not a general promise not to cause damage
A tenant that plans to bring in anything heavier than office furniture should be asked for a full list of the equipment, its weight, and how it will be moved into position, forklift, steel tracks, dollies, or crane. That information lets a landlord set an actual floor loading limit in the lease rather than discovering after the fact what the slab could and couldn't take. It matters because the general law default isn't generous to a landlord who hasn't drafted around it: ordinary fair wear and tear from permitted use typically falls to the landlord, and unless the lease clearly allocates responsibility for damage caused by the tenant's own equipment, a landlord can end up carrying repair costs that were really caused by how the business operated, not by the building ageing normally.
A Prestons warehouse shows what happens when none of this is written down
A 2023 NSW Supreme Court decision is a useful illustration of why these questions can't wait until there's a problem. Ms Morabito leased an industrial warehouse and carpark at Prestons, in Sydney's south-west, to Kingston Industries Pty Ltd under a lease that began in 2010. When the tenant vacated in December 2017, the landlord argued that the way Kingston Industries had used heavy machinery on site, some of it moved around on steel tracks without protective matting, went beyond the lease's permitted use and left the concrete floor and carpark slab damaged. She sought the cost of replacing 55 per cent of the warehouse floor and the whole of the carpark slab, around $344,000, plus $294,416.73 in lost rent for the 17 months the warehouse sat empty before she found a new tenant.
Justice Peden rejected every part of the claim. The court found the floor and slab had construction deficiencies that predated the tenancy and fell outside what the make-good obligations could fairly be read to cover, so the damage couldn't be pinned on the tenant's machinery without a reliable record of the floor's actual condition at the start of the lease. The 17-month lost-rent claim failed for a separate reason: the landlord hadn't taken reasonable steps to mitigate the loss by getting the warehouse repaired and back on the market sooner. The lesson runs both ways. A landlord who never documented the floor's condition, the agreed permitted use in enough detail, or what machinery the tenant was allowed to bring in has very little to point to years later when something looks like damage. And a landlord who does have that record still has to act on it promptly once a tenant leaves, or risk losing the very damages a stronger case might otherwise have supported.
What to actually ask before handing over the keys
Put the condition of the premises on the record before the tenant moves in: photographs and a written condition report of the floor, structure and any existing fixtures, not just a general statement that the premises are in good repair. Get the fit-out and equipment questions above answered in writing, and have them attached to or referenced in the lease rather than left as email correspondence that's easy to lose track of years later. Check the financial security being offered matches the risk: a bank guarantee should name both parties correctly, come from an Australian-licensed bank, and ideally be assignable if the property is sold, with its amount reviewed if the tenant later wants to bring in higher-value equipment. And confirm the tenant's public liability insurance will note the landlord as an interested party and stay current for the life of the lease, since a lapsed policy is often discovered only when it's needed.
None of this has to slow down a deal that's otherwise sound. A short list of specific questions, answered in writing before the lease is signed, costs a landlord nothing and gives both sides something concrete to point to if the tenancy doesn't go to plan.