Most landlords check a prospective tenant carefully before signing and then rarely look again. The tenant's circumstances, though, keep changing for the whole term of the lease. This guide covers what to check up front, what can go wrong afterwards and a simple routine for keeping track of many tenants.
This is general information, not legal advice. Take advice on your lease and guarantee.
Checks before signing
Before a lease is signed, confirm that the entity you are dealing with is what it says it is and is in good standing. The public registers give you most of what you need.
- ABN status. Check that the ABN is active and the entity name matches the lease. The ABN status guide explains what each status means.
- Company status. Confirm the company is registered and not deregistered or in external administration.
- Officeholders. Note the current directors and secretary, and compare them with the people you have been negotiating with.
- Business name. If the tenant trades under a business name, confirm it is registered and who holds it.
- PPSR security interests. Where the tenant is an ACN-registered company, search for security interests registered against it. A register full of competing interests over its assets tells you something about its financial position. See the PPSR guide.
- Insolvency notices. Check for notices lodged against the company.
- The guarantor. Identify who is giving the guarantee, and run the same checks on a corporate guarantor.
One point worth stating plainly: PPSR monitoring applies to ACN, ARBN and ARSN-registered entities. It does not cover tenants that only have an ABN, such as sole traders, trusts and partnerships. You can still run a manual PPSR search against them, and MonitorHQ continues to watch their ABN and business names.
Why the risk continues during the lease
A clean check at signing describes the tenant on that day. Over a multi-year term, several things can change without the landlord being told:
- The tenant company enters external administration or has an insolvency notice lodged.
- The ABN is cancelled, which can affect how invoices and tax treatment work.
- The business name lapses, or is held by someone else.
- A director who was central to the deal resigns, or the guarantor changes.
- Security interests are registered over the tenant's assets, which can signal new borrowing.
Any of these can be an early sign that rent may become harder to collect. Finding out at the first missed payment is much later than finding out when the record changes.
A routine for landlords and property managers
If you manage many tenancies, a manual search per tenant does not stay up to date. A routine is more reliable.
- List every tenant entity, its ABN, its ACN where it has one, and the guarantor.
- Group tenants by exposure, for example rent size, lease length or bond held.
- Review higher-exposure tenants more often.
- Check the same items each time: ABN status, company status, officeholders, business name, insolvency notices and, for ACN-registered tenants, security interests.
- Record the date and result of each review in the tenant file.
- Re-check at key points such as renewals, rent reviews and requests to assign or sublease.
Our guide on how to monitor company changes goes further on setting this up, and business name monitoring covers the lapse risk.
When a red flag appears
A change on the record is a prompt to look closer, not proof of trouble. A sensible sequence:
- Talk to the tenant. There is often an ordinary explanation, such as a restructure or an updated registered address.
- Review the history. See what changed and when, and whether it fits what you were told.
- Review the guarantee. Check who is covered and whether the guarantor's position has changed.
- Check your own file. Confirm bond, insurance and payment history.
- Take advice. If the change looks serious, speak to your lawyer before acting on the lease.
Avoid reacting to a single data point. Acting quickly and acting calmly are both possible.
Quick checklist
- Tenant and guarantor entities listed with ABN and ACN
- Pre-signing checks recorded
- Review frequency matched to exposure
- Named person responsible for reviewing changes
- Re-check at renewal and rent review
How MonitorHQ helps
MonitorHQ watches ABN, company, business name and PPSR records for each tenant entity and alerts you quickly when something changes. PPSR monitoring covers ACN, ARBN and ARSN-registered entities only. See MonitorHQ for commercial landlords or read about ABN monitoring.