Ready to use legal template

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Ready to use legal template

Drafted by lawyers

Compliant with Australian law

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Learn more about Commercial Lease Agreement in Australia

This Commercial Lease Agreement is a comprehensive solution for leasing commercial properties across Australia. Our legally vetted and user-friendly Word template is tailored specifically for the Australian market, covering all essential clauses and provisions necessary to protect both landlords and tenants. From office spaces to retail premises and industrial properties, this Commercial Lease Agreement ensures clarity and flexibility, addressing key aspects such as rent, lease duration, maintenance responsibilities, and dispute resolution. This agreement reflects the latest legal standards and practices in Australian commercial leasing, providing peace of mind to all parties involved.

Table of contents


What is a Commercial Lease Agreement?

A Commercial Lease Agreement is a legally binding document governed by Australian law, outlining the terms and conditions under which one party agrees to lease another party’s property. In Australia, this agreement dictates the rights and responsibilities of both the landlord and the tenant. It requires the tenant, also known as the lessee, to make regular monthly payments over a specified period in exchange for the use of the landlord’s property for commercial purposes. Failure to adhere to the terms of the agreement can result in legal repercussions for both parties. Our customizable template provides a framework that aligns with Australian legal standards, ensuring clarity and compliance for landlords and tenants alike. Simplify the leasing process and establish a secure foundation for your commercial property transactions with our Australian Commercial Lease Agreement template.

What is included in the Commercial Rental Contract?

1. Property information, including the landlord and renters

When completing the property information section, it is imperative to detail the type of business premise being leased, whether it be a shop lot, shop unit, office lot, or any other commercial space, along with the nature of the business to be conducted at the property. Furthermore, in accordance with Australian legal requirements, if either the landlord or tenant is a corporation, the agreement must include the entity’s full name, company number, and registered address. Alternatively, if the landlord or tenant is an individual, the agreement should clearly state their full name along with their NRIC number or passport number for identification purposes, ensuring compliance and transparency in all leasing transactions.

2. Utilities deposit and refundable deposit

The security deposit is a sum of money that is usually equivalent to a number of months’ rent, depending on the tenancy period specified in the tenancy agreement, and it is paid to the landlord by the tenant upon execution of the tenancy agreement to protect the landlord from any breach of agreement on the tenant’s part. The utility deposit will be used by the landlord to cover any unpaid utility bills at the conclusion of the tenancy.

3. Monthly lease

To preserve the interests of both parties, the monthly rental due by the tenant for the demolished premises should be specified as clearly as possible. To minimize any potential disputes, the tenancy agreement should include the date on which rent is to be paid as well as the mode of payment.

4. Failure to make monthly rental payments

Most commercial tenancy agreements provide a “grace period” for a reasonable number of days beyond the payment’s due date. Once the grace period has elapsed, the landlord may levy late payment interest on the outstanding balance.

5. Clause of Force Majeure

This is an important provision in a tenancy contract that releases both parties from responsibilities or duties in the case of an unanticipated incident that is beyond both parties’ control.

Are there any restrictions on the use of commercial space?

In Australia, restrictions on the use of commercial space are commonly outlined in the Commercial Lease Agreement and may also be subject to local zoning laws and regulations. The permitted use of commercial premises typically depends on factors such as the property’s zoning classification, planning permissions, and any specific restrictions or covenants imposed by the landlord or local authorities. Commercial Lease Agreements often include clauses specifying the permitted use of the premises, which may restrict activities to certain business purposes or industries. Tenants must adhere to these restrictions and seek landlord consent for any changes to the approved use of the space. Failure to comply with permitted use restrictions may result in breaches of the lease agreement and potential legal consequences.

What are the rent payment terms in a Commercial Lease Agreement?

Rent payment terms in a Commercial Lease Agreement typically outline the frequency, amount, and method of rent payments required by the tenant. Common rent payment terms include:

Rent Amount: The total rent payable by the tenant over the lease term, often expressed as a monthly or annual sum.
Payment Frequency: The frequency at which rent payments are due, such as monthly, quarterly, or annually.
Payment Method: Accepted methods of rent payment, which may include direct bank transfers, checks, or electronic payments.
Rent Review Mechanism: Provisions for rent reviews, specifying how and when rent increases may occur over the lease term, such as fixed percentage increases or market rent reviews.
Late Payment Penalties: Consequences for late rent payments, such as late fees or interest charges.

It’s essential for tenants to understand and comply with the rent payment terms outlined in the Commercial Lease Agreement to avoid breaches of the lease and potential penalties.

What insurance requirements are stipulated in the Commercial Lease Agreement?

Commercial Lease Agreements commonly include insurance requirements to protect both landlords and tenants from potential risks and liabilities associated with the leased premises. Typical insurance requirements may include:

Public Liability Insurance: Coverage for third-party injury or property damage that occurs on the leased premises.
Building Insurance: Coverage for damage to the building structure and fixtures caused by perils such as fire, flood, or storm damage.
Contents Insurance: Coverage for the tenant's business equipment, inventory, and fixtures located within the leased premises.
Indemnity Insurance: Coverage to indemnify the landlord or tenant against claims arising from contractual liabilities or specific risks.

The Commercial Lease Agreement may specify minimum coverage amounts, policy terms, and requirements for providing evidence of insurance to the other party. Both landlords and tenants should review insurance provisions carefully and ensure compliance with insurance requirements throughout the lease term.

What are the responsibilities of the landlord and tenant in a commercial lease?

In a commercial lease arrangement, both the landlord and tenant have distinct responsibilities outlined in the Commercial Lease Agreement. Some common responsibilities include:

1. Landlord Responsibilities

Maintaining the structural integrity of the premises, ensuring compliance with building codes and safety regulations, providing essential services such as utilities and security, and addressing structural repairs or maintenance issues.

2. Tenant Responsibilities

Paying rent and other charges promptly, maintaining the interior of the premises in good condition, complying with permitted use restrictions, obtaining necessary licenses or permits for operating the business, and complying with health and safety regulations.
Additionally, the Commercial Lease Agreement may specify specific obligations related to repairs, maintenance, alterations, signage, utilities, and property taxes. Both parties should understand their respective responsibilities and obligations under the lease agreement to avoid disputes and ensure the smooth operation of the leased premises.

What rights does the landlord retain over the property during the lease term?

Throughout the lease term, landlords retain various rights over the property, as stipulated in the Commercial Lease Agreement and governed by tenancy laws. Some common rights of landlords in a commercial lease arrangement include:

Right to collect rent payments and enforce lease provisions.

Right to access the premises for inspection, repairs, or maintenance purposes, subject to providing proper notice to the tenant.

Right to enforce lease terms and take legal action against tenants for breaches of the lease agreement, such as non-payment of rent or property damage.

Right to terminate the Lease Agreement in accordance with legal requirements and specified grounds for termination, such as non-compliance with lease terms or expiration of the lease term.

Understanding these rights is crucial for landlords to effectively manage the leased property and enforce their obligations under the Commercial Lease Agreement.

Can I renew the Commercial Lease Agreement in Australia?

Renewal options are commonly included in Commercial Tenancy Agreements in Australia, especially for businesses that have established a customer base over several years. Given the value of an established clientele, it’s typical for tenants to prefer continuity rather than relocating. The length of the renewal option is often specified, providing tenants the opportunity to extend the agreement beyond the initial term. However, tenants should carefully review the wording of the option to renew clause. If the term “may” is used, it grants the landlord discretion to renew the tenancy or not. Conversely, if “must” is stipulated, the landlord is obligated to renew the tenancy, offering tenants greater security and predictability.

Are there any additional fees or charges beyond the rent specified in the agreement?

There may be additional fees or charges beyond the rent specified in a Commercial Lease Agreement. These fees are typically outlined in the lease agreement and can include operating expenses such as maintenance, utilities, property management fees, and common area maintenance (CAM) fees. Tenants may also be responsible for property tax increases, insurance costs, and renewal or extension fees if applicable. It’s essential for tenants to review the lease agreement carefully to understand their financial obligations and budget accordingly.

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