Navigating a Commercial Tenant Fit Out: What You Need to Know Before Signing a Lease

A commercial tenant fit out can be an exciting opportunity to create a workspace that reflects your brand, improves productivity, and sets the right impression for clients. But for many tenants, the process comes with unexpected costs and responsibilities — especially when it comes to understanding where the landlord’s role ends and where the tenant’s begins.

In buildings with multiple tenants, those lines can get blurred. A landlord provides the essential base building services — electrical, mechanical, hydraulic, and fire systems — but once you begin to modify your tenancy, your fit out may trigger upgrades to those systems. These upgrades can be costly, and unless carefully addressed in your lease negotiations, the responsibility could fall to you.

So how can you navigate the process and avoid being caught out? Let’s break down some of the key considerations when planning a commercial tenant fit out.

Base Building vs Tenant Fit Out Responsibilities

When moving into a multi-tenant building, the landlord is responsible for supplying the base building services. These include:

Electrical infrastructure (main switchboards, incoming supply)
Mechanical services (air conditioning, ventilation)
Hydraulic systems (water supply, sewer)
Fire services (sprinklers, alarms, emergency systems)

However, as soon as you start altering your tenancy, these systems may need to be upgraded or modified to comply with current Building Code of Australia (BCA) standards. For example, adding new office partitions or relocating workstations might seem minor, but they can impact fire sprinkler coverage, ventilation requirements, or even emergency egress paths.

This is where many tenants face unexpected costs: although these systems belong to the landlord, your modifications could trigger the need for base building upgrades — and you may be expected to contribute.

Fire Services: The Most Common Upgrade

Fire services are one of the biggest areas where tenants encounter hidden responsibilities during a commercial tenant fit out. Older buildings often don’t meet today’s stricter compliance standards, and any new fit out can expose those gaps.

Typical upgrades include:

Sprinkler heads: Relocation or replacement to maintain adequate coverage after a new layout.
Fireproofing: Ensuring walls, ceilings, and structural elements meet current fire ratings.
Emergency systems: New regulations often require additional emergency warning intercom system (EWIS) speakers, or an upgraded fire panel to handle expanded capacity.

For example, if your fit out requires new emergency speakers but the existing EWIS panel doesn’t have the capacity, who pays for the upgrade? This is a common grey area that needs to be resolved before committing to a lease.

The Hidden Impact of Older Buildings

If you’re moving into a building that was previously occupied by a single tenant, additional complications can arise. In these cases, the landlord may need to reconfigure services to suit multiple tenants, such as:

Splitting electrical supply into separately metered areas
Rebalancing mechanical systems to ensure adequate air distribution
Adjusting fire services to account for new tenancy boundaries

These changes can be significant, and unless your lease makes clear that the landlord will cover the costs, you may find yourself contributing to upgrades that primarily benefit the building as a whole.

How to Protect Yourself in a Commercial Tenant Fit Out

To avoid unexpected costs and disputes, tenants should take proactive steps before signing a lease. Here are three key strategies:

Conduct a technical due diligence review. Engage a project manager or building consultant to review the base building services, identify potential compliance gaps, and estimate what upgrades might be triggered by your fit out.
Negotiate responsibilities in the lease. Clearly define which costs the landlord will cover, particularly when upgrades benefit the entire building. Don’t assume that because a system is a “landlord service,” they will automatically pay for it.
Plan your fit out with compliance in mind. Design decisions — from partition layouts to ceiling configurations — can have a big impact on compliance requirements. Working with experienced fit out project managers ensures your design is both functional and cost-effective.

Why Expert Guidance Matters

Undertaking a commercial tenant fit out isn’t just about furniture and finishes — it’s about navigating complex building services, compliance requirements, and landlord negotiations. Without expert guidance, tenants risk being surprised by major costs partway through their project.

At Upscale PM, we’ve seen first-hand how these challenges can play out. By identifying risks early, engaging with landlords and consultants, and managing the fit out process from design to delivery, we help tenants move into spaces that work — without unnecessary surprises.

Final Thoughts

A commercial tenant fit out is an opportunity to transform your workspace, but it’s also a process filled with potential pitfalls. The most common challenges arise around compliance and responsibility for building services upgrades — especially in older buildings or those transitioning from single to multiple tenants.

By approaching the process strategically, conducting thorough due diligence, and negotiating responsibilities up front, you can protect your budget and ensure a smoother journey to your new office.

Planning a commercial tenant fit out? Call 02 9090 4480 to discuss your project and find out how Upscale PM can help you navigate the process with confidence.

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