Understanding Outgoings in Commercial Leases

When leasing commercial, industrial or retail property in South Australia, one of the most important components of your lease is outgoings. Whether you’re a landlord or a tenant, knowing how outgoings work is essential for managing costs and avoiding surprises.

What are outgoings?

Outgoings refer to the expenses a landlord incurs directly from owning and maintaining a property. These can include:

• Council rates

• Water charges

• Utilities

• Insurance

• Pest control

• Cleaning

• Emergency Services Levy

• Management fees

• Audit fees

These costs are often passed on to tenants, depending on the lease agreement.

How are outgoings calculated?

One common way to calculate outgoings is by apportioning them based on lettable area. For example, if a tenant occupies 300 square metres in a building with a total lettable area of 1,000 square metres, they would typically be responsible for 30% of the outgoings.

However, this isn’t the only method. The exact approach may vary depending on the lease terms and the type of property involved.

Who is responsible for paying outgoings?

The responsibility for paying outgoings should always be clearly detailed in the Lease Agreement or Disclosure Statement.

In most cases, the tenant is responsible for covering these outgoings, though the specifics depend on the negotiations between the landlord and tenant.

While commercial and industrial leases typically permit landlords to pass on most, if not all, variable outgoings to tenants, retail leases face stricter limitations under the Retail Leases Act. 

Need help navigating your outgoings?

At Key + Stone Property, we specialise in helping landlords and tenants understand how outgoings are calculated, what costs are recoverable and who is ultimately responsible. With extensive experience across commercial, industrial and retail property, our team provides clear, tailored guidance based on the specific terms of your lease.

From complex apportionment methods to navigating legal frameworks like the Retail Leases Act, we’re here to ensure transparency, compliance and fair outcomes for all parties.

Get in touch with the team at Key + Stone Property. We're here to support you every step of the way.

Readers should seek independent legal advice tailored to their specific circumstances. Key and Stone Property Pty Ltd do not accept any liability for the accuracy or applicability of the information provided herein.