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Commercial Lease Agreement

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COMMERCIAL LEASE AGREEMENT

THIS LEASE (this "Lease") dated this ________ day of ________________, ________

BETWEEN:

______________________ of _________________________________
Telephone: ______________________  
(the "Landlord")

OF THE FIRST PART


- AND -

______________________ of _________________________________
Telephone: ______________________
(the "Tenant")

OF THE SECOND PART

IN CONSIDERATION OF the Landlord leasing certain premises to the Tenant, the Tenant leasing those premises from the Landlord and the mutual benefits and obligations set forth in this Lease, the receipt and sufficiency of which consideration is hereby acknowledged, the Parties to this Lease (the "Parties") agree as follows:

  1. Definitions
  2. When used in this Lease, the following expressions will have the meanings indicated:
    1. "Additional Rent" means all amounts payable by the Tenant under this Lease except Base Rent, whether or not specifically designated as Additional Rent elsewhere in this Lease;
    2. "Building" means all buildings, improvements, equipment, fixtures, property and facilities from time to time located at ______________________________, as from time to time altered, expanded or reduced by the Landlord in its sole discretion;
    3. "Common Areas and Facilities" mean:
      1. those portions of the Building areas, buildings, improvements, facilities, utilities, equipment and installations in or forming part of the Building which from time to time are not designated or intended by the Landlord to be let to tenants of the Building including, without limitation, exterior weather walls, roofs, entrances and exits, parking areas, driveways, loading docks and area, storage, mechanical and electrical rooms, areas above and below leasable premises and not included within leasable premises, security and alarm equipment, grassed and landscaped areas, retaining walls and maintenance, cleaning and operating equipment serving the Building; and
      2. those lands, areas, buildings, improvements, facilities, utilities, equipment and installations which serve or are for the useful benefit of the Building, the tenants of the Building or the Landlord and those having business with them, whether or not located within, adjacent to or near the Building and which are designated from time to time by the Landlord as part of the Common Areas and Facilities;
    4. "Leasable Area" means with respect to any rentable premises, the area expressed in square metres of all floor space including floor space of mezzanines, if any, determined, calculated and certified by the Landlord and measured from the exterior face of all exterior walls, doors and windows, including walls, doors and windows separating the rentable premises from enclosed Common Areas and Facilities, if any, and from the centre line of all interior walls separating the rentable premises from adjoining rentable premises. There will be no deduction or exclusion for any space occupied by or used for columns, ducts or other structural elements;
    5. "Premises" means the office space at ______________________________.
    6. "Rent" means the total of Base Rent and Additional Rent.
  3. Intent of Lease
  4. It is the intent of this Lease and agreed to by the Parties to this Lease that rent for this Lease will be on a gross rent basis meaning the Tenant will pay the Base Rent and any Additional Rent and the Landlord will be responsible for all other service charges related to the Premises and the operation of the Building save as specifically provided in this Lease to the contrary.
  5. Leased Premises
  6. The Landlord agrees to rent to the Tenant the office space municipally described as ______________________________ (the "Premises").
  7. The Premises will be used for only the following permitted use: ______________________________________________________________________
                   ______________________________________________________________________ (the "Permitted Use").

  8. The Landlord reserves the right in its reasonable discretion to alter, reconstruct, expand, withdraw from or add to the Building from time to time. In the exercise of those rights, the Landlord undertakes to use reasonable efforts to minimise any interference with the visibility of the Premises and to use reasonable efforts to ensure that direct entrance to and exit from the Premises is maintained.
  9. The Tenant acknowledges that the Landlord or its agent will have the right to enter the Premises at all reasonable times to show them to prospective purchasers, encumbrancers, lessees or assignees, and may also during the 90 days preceding the termination of the terms of this Lease, place upon the Premises the usual type of notice to the effect that the Premises are for rent, which notice the Tenant will permit to remain on them.
  10. Term
  11. The term of the Lease commences at 12:00 noon on 19 March 2024 and ends at 12:00 noon on 19 March 2029 (the "Term").
  12. Should the Tenant remain in possession of the Premises with the consent of the Landlord after the natural expiration of this Lease, a new tenancy from month to month will be created between the Landlord and the Tenant which will be subject to all the terms and conditions of this Lease but will be terminable upon either party giving one month's notice to the other party.
  13. Rent
  14. Subject to the provisions of this Lease, the Tenant will pay a base rent of $__________, payable per month, for the Premises (the "Base Rent"), without setoff, abatement or deduction.
  15. The Tenant will pay the Base Rent on or before the _________________________________________ of each and every month of the Term to the Landlord.
  16. Use and Occupation
  17. The Tenant will use and occupy the Premises only for the Permitted Use and for no other purpose whatsoever.  The Tenant will carry on business under the name of ______________________ and will not change such name without the prior written consent of the Landlord, such consent not to be unreasonably withheld. The Tenant will open the whole of the Premises for business to the public fully fixtured, stocked and staffed on the date of commencement of the term and throughout the term, will continuously occupy and utilise the entire Premises in the active conduct of its business in a reputable manner on such days and during such hours of business as may be determined from time to time by the Landlord.
  18. The Tenant covenants that the Tenant will carry on and conduct its business from time to time carried on upon the Premises in such manner as to comply with any statute, including any subordinate legislation, which is in force now or in the future and taking into account any amendment or re-enactment, or any government department, local authority, other public or competent authority or court of competent jurisdiction and of the insurers in relation to the use, occupation and enjoyment of the Building (including in relation to health and safety compliance with the proper practice recommended by all appropriate authorities).
  19. Quiet Enjoyment
  20. The Landlord covenants that on paying the Rent and performing the covenants contained in this Lease, the Tenant will peacefully and quietly have, hold, and enjoy the Premises for the agreed term.
  21. Overholding
  22. If the Tenant continues to occupy the Premises without the written consent of the Landlord after the expiration or other termination of the Term, then, without any further written agreement, the Tenant will be a month-to-month tenant at a minimum monthly rental equal to twice the Base Rent and subject always to all of the other provisions of this Lease insofar as the same are applicable to a month-to-month tenancy and a tenancy from year to year will not be created by implication of law.
  23. Additional Rights on Reentry
  24. If the Landlord reenters the Premises or terminates this Lease, then:
    1. notwithstanding any such termination or the Term thereby becoming forfeited and void, the provisions of this Lease relating to the consequences of termination will survive;
    2. the Landlord may use such reasonable force as it may deem necessary for the purpose of gaining admittance to and retaking possession of the Premises and the Tenant hereby releases the Landlord from all actions, proceedings, claims and demands whatsoever for and in respect of any such forcible entry or any loss or damage in connection therewith or consequential thereupon;
    3. the Landlord may expel and remove, forcibly, if necessary, the Tenant, those claiming under the Tenant, and their effects, as allowed by law, without being taken or deemed to be guilty of any manner of trespass;
    4. in the event that the Landlord has removed the property of the Tenant, the Landlord may store such property in a public warehouse or at a place selected by the Landlord, at the expense of the Tenant. If the Landlord feels that it is not worth storing such property given its value and the cost to store it, then the Landlord may dispose of such property in its sole discretion and use such funds, if any, towards any indebtedness of the Tenant to the Landlord. The Landlord will not be responsible to the Tenant for the disposal of such property other than to provide any balance of the proceeds to the Tenant after paying any storage costs and any amounts owed by the Tenant to the Landlord;
    5. the Landlord may relet the Premises or any part of the Premises for a term or terms which may be less or greater than the balance of the Term remaining and may grant reasonable concessions in connection with such reletting including any alterations and improvements to the Premises;
    6. after reentry, the Landlord may procure the appointment of a receiver to take possession and collect rents and profits of the business of the Tenant, and, if necessary to collect the rents and profits the receiver may carry on the business of the Tenant and take possession of the personal property used in the business of the Tenant, including inventory, trade fixtures, and furnishings, and use them in the business without compensating the Tenant;
    7. after reentry, the Landlord may terminate the Lease on giving 5 days' written notice of termination to the Tenant. Without this notice, reentry of the Premises by the Landlord or its agents will not terminate this Lease;
    8. the Tenant will pay to the Landlord on demand:
      1. all rent, Additional Rent and other amounts payable under this Lease up to the time of reentry or termination, whichever is later;
      2. reasonable expenses as the Landlord incurs or has incurred in connection with the reentering, terminating, reletting, collecting sums due or payable by the Tenant, realising upon assets seised; including without limitation, brokerage, fees and expenses and legal fees and disbursements and the expenses of keeping the Premises in good order, repairing the same and preparing them for reletting; and
      3. as liquidated damages for the loss of rent and other income of the Landlord expected to be derived from this Lease during the period which would have constituted the unexpired portion of the Term had it not been terminated, at the option of the Landlord, either:
        1. an amount determined by reducing to present worth at an assumed interest rate of 12% per annum all Base Rent and estimated Additional Rent to become payable during the period which would have constituted the unexpired portion of the Term, such determination to be made by the Landlord, who may make reasonable estimates of when any such other amounts would have become payable and may make such other assumptions of the facts as may be reasonable in the circumstances; or
        2. an amount equal to the Base Rent and estimated Additional Rent for a period of six months.
  25. Inspections and Landlord's Right to Enter
  26. During the Term and any renewal of this Lease, the Landlord and its agents may enter the Premises to make inspections or repairs. Except where the Landlord or its agents consider it an emergency, the Landlord will provide the Tenant with written notice 24 hours prior to entering.
  27. Utilities and Other Costs
  28. The Landlord is responsible for the payment of the following utilities and other charges in relation to the Premises: electricity, natural gas, water, sewer, telephone, internet and cable.
  29. Insurance
  30. The Tenant is hereby advised and understands that the personal property of the Tenant is not insured by the Landlord for either damage or loss, and the Landlord assumes no liability for any such loss. The Tenant is advised that, if insurance coverage is desired by the Tenant, the Tenant should inquire of Tenant's insurance agent regarding a Tenant's policy of insurance.
  31. Abandonment
  32. If at any time during the Term, the Tenant abandons the Premises or any part of the Premises, the Landlord may, at its option, enter the Premises by any means without being liable for any prosecution for such entering, and without becoming liable to the Tenant for damages or for any payment of any kind whatever, and may, at the Landlord's discretion, as agent for the Tenant, relet the Premises, or any part of the Premises, for the whole or any part of the then unexpired Term, and may receive and collect all rent payable by virtue of such reletting, and, at the Landlord's option, hold the Tenant liable for any difference between the Rent that would have been payable under this Lease during the balance of the unexpired Term, if this Lease had continued in force, and the net rent for such period realised by the Landlord by means of the reletting. If the Landlord's right of reentry is exercised following abandonment of the premises by the Tenant, then the Landlord may consider any personal property belonging to the Tenant and left on the Premises to also have been abandoned, in which case the Landlord may dispose of all such personal property in any manner the Landlord will deem proper and is relieved of all liability for doing so.
  33. Tenant's Indemnity
  34. The Tenant will and does hereby indemnify and save harmless the Landlord of and from all loss and damage and all actions, claims, costs, demands, expenses, fines, liabilities and suits of any nature whatsoever for which the Landlord will or may become liable, incur or suffer by reason of a breach, violation or nonperformance by the Tenant of any covenant, term or provision hereof or by reason of any construction or other liens for any work done or materials provided or services rendered for alterations, improvements or repairs, made by or on behalf of the Tenant to the Premises, or by reason of any injury occasioned to or suffered by any person or damage to any property, or by reason of any wrongful act or omission, default or negligence on the part of the Tenant or any of its agents, concessionaires, contractors, customers, employees, invitees or licensees in or about the Building, or any losses caused, or contributed to, by any trespasser while that trespasser is on the Premises.
  35. Governing Law
  36. It is the intention of the Parties to this Lease that the tenancy created by this Lease and the performance under this Lease, and all suits and special proceedings under this Lease, be construed in accordance with and governed, to the exclusion of the law of any other forum, by the laws of the Australian Capital Territory, without regard to the jurisdiction in which any action or special proceeding may be instituted.
  37. It is the intention of the Parties that this Lease is a retail lease governed by the Leases (Commercial and Retail) Act 2001, or any successor retail lease legislation.
  38. Severability
  39. If there is a conflict between any provision of this Lease and the applicable legislation of the Territory of Australian Capital Territory (the "Act"), the Act will prevail and such provisions of the Lease will be amended or deleted as necessary in order to comply with the Act. Further, any provisions that are required by the Act are incorporated into this Lease.
  40. Assignment and Subletting
  41. The Tenant will not assign this Lease in whole or in part, nor sublet all or any part of the Premises, nor grant any license or part with possession of the Premises or transfer to any other person in whole or in part or any other right or interest under this Lease (except to a parent, subsidiary or affiliate of the Tenant), without the prior written consent of the Landlord in each instance, which consent will not be unreasonably withheld so long as the proposed assignment or sublease complies with the provisions of this Lease.
  42. Before giving consent, the Landlord may require reasonable documentation to satisfy the Landlord that the proposed assignee or subtenant is capable of performing the Tenant's obligations under this Lease.
  43. If the Lease is assigned or if the Premises or any part of the Premises are sublet or occupied by anyone other than the Tenant, the Landlord may collect rent directly from the assignee, subtenant or occupant, and apply the net amount collected, or the necessary portion of that amount, to the rent owing under this Lease.
  44. The prohibition against assigning or subletting without the consent required by this Lease will be constructed to include a prohibition against any assignment or sublease by operation of law.
  45. The consent by the Landlord to any assignment or sublease will not constitute a waiver of the necessity of such consent to any subsequent assignment or sublease.
  46. Bulk Sale
  47. No bulk sale of goods and assets of the Tenant may take place without first obtaining the written consent of the Landlord, which consent will not be unreasonably withheld so long as the Tenant and the Purchaser are able to provide the Landlord with assurances, in a form satisfactory to the Landlord, that the Tenant’s obligations in this Lease will continue to be performed and respected, in the manner satisfactory to the Landlord, after completion of the said bulk sale.
  48. Care and Use of Premises
  49. The Tenant will promptly notify the Landlord of any damage, or of any situation that may significantly interfere with the normal use of the Premises.
  50. The Tenant will not make (or allow to be made) any noise or nuisance which, in the reasonable opinion of the Landlord, disturbs the comfort or convenience of other tenants.
  51. The Tenant will not engage in any illegal trade or activity on or about the Premises.
  52. The Landlord and Tenant will comply with standards of health, sanitation, fire, housing and safety as required by law.
  53. Surrender of Premises
  54. At the expiration of the lease term, the Tenant will quit and surrender the Premises in as good a state and condition as they were at the commencement of this Lease, reasonable use and wear and damages by the elements excepted.
  55. Hazardous Materials
  56. The Tenant will not keep or have on the Premises any article or thing of a dangerous, flammable, or explosive character that might unreasonably increase the danger of fire on the Premises or that might be considered hazardous by any responsible insurance company.
  57. Rules and Regulations
  58. The Tenant will obey all rules and regulations posted by the Landlord regarding the use and care of the Building, parking lot and other common facilities that are provided for the use of the Tenant in and around the Building on the Premises.
  59. General Provisions
  60. Any waiver by the Landlord of any failure by the Tenant to perform or observe the provisions of this Lease will not operate as a waiver of the Landlord's rights under this Lease in respect of any subsequent defaults, breaches or nonperformance and will not defeat or affect in any way the Landlord's rights in respect of any subsequent default or breach.
  61. This Lease will extend to and be binding upon and inure to the benefit of the respective heirs, executors, administrators, successors and assigns, as the case may be, of each party to this Lease. All covenants are to be construed as conditions of this Lease.
  62. All sums payable by the Tenant to the Landlord pursuant to any provision of this Lease will be deemed to be Additional Rent and will be recoverable by the Landlord as rental arrears.
  63. Where there is more than one Tenant executing this Lease, all Tenants are jointly and severally liable for each other's acts, omissions and liabilities pursuant to this Lease.
  64. Time is of the essence in this Lease.
  65. This Lease will constitute the entire agreement between the Landlord and the Tenant. Any prior understanding or representation of any kind preceding the date of this Lease will not be binding on either party to this Lease except to the extent incorporated in this Lease. In particular, no warranties of the Landlord not expressed in this Lease are to be implied.

IN WITNESS WHEREOF the Parties to this Lease have duly affixed their signatures under hand and seal, or by a duly authorised officer under seal, on this ________ day of ________________, ________




______________________________
(Witness)

______________________ (Landlord)

Per:______________________(SEAL)




______________________________
(Witness)

______________________ (Tenant)

Per:______________________(SEAL)

FEATURED IN

Last Updated February 28, 2024

Commercial Lease Agreement Information

Alternate Names:

A Commercial Lease Agreement is also called a/an:

  • Business Lease
  • Commercial Real Estate Lease
  • Commercial Property Lease
  • Industrial Property Lease
  • Office Space Lease
  • Retail Lease

What is a Commercial Lease?

A Commercial Lease Agreement is a contract between a landlord and a tenant that outlines the terms of a commercial tenancy and the rights and responsibilities of the parties involved.

LawDepot's Commercial Lease Agreement is tailored to meet the governing laws in Australian states and territories, including:

  • Australian Capital Territory (ACT)
  • New South Wales (NSW)
  • Northern Territory (NT)
  • Queensland (QLD)
  • South Australia (SA)
  • Tasmania (TAS)
  • Victoria (VIC)
  • Western Australia (WA)

What is the difference between a Commercial and Residential Lease?

Unlike a Residential Lease that is used for personal housing, a Commercial Lease is used for business properties (such as office suites, retail stores, workshops, warehouses, scrapyards, etc.) where individuals or companies perform their business operations.

Different legislation applies to commercial and residential leases, so the government protection that tenants are entitled to may vary. You can consult your local laws to confirm your rights and obligations as a landlord or tenant in a Commercial Lease.

What are the different types of commercial properties?

A commercial property is a piece of land or a building that is used to generate a profit, typically by selling goods and/or services.

LawDepot provides a Commercial Lease Agreement customisable for commercial properties such as:

  • Industrial buildings: spaces related to manufacturing, such as factories and workshops
  • Office spaces: includes individual suites or entire office buildings
  • Retail stores: where goods or services are sold in a property (smaller shops may be protected by retail lease legislation)
  • Restaurants: where food and drinks are sold to customers
  • Warehouses: where goods are stored or sold at wholesale prices
  • Other properties: includes miscellaneous commercial real estate, such as a commercial kitchen or commissary

How long should a Commercial Lease be?

Though a typical Commercial Lease may last three to five years, the length of your Commercial Lease will often depend on factors like your current business situation, the location of the commercial property, and the cost of rent.

For example, a new startup may want to enter a short-term lease to avoid getting locked into a lease term they might not be able to afford, but an established business may want to enter a long-term lease to reap benefits like signing incentives (e.g. first month's rent free) or landlord concessions (e.g. the landlord pays the realtor broker's fee).

It's also important to note that in most Australian states and territories the tenant of a retail lease has the right to a minimum tenancy period of up to five years. To confirm lease requirements in your jurisdiction, you can consult your local small business board.

What terms and provisions are covered in a Commercial Lease?

The terms of a Commercial Lease can vary depending on the length of a tenancy, the type of commercial property, and the purpose for renting the space.

Generally, a Commercial Lease will cover terms such as:

  • The lease: A lease can end on a fixed date (a periodic tenancy) or continue indefinitely until one of the parties terminates the contract (an automatic renewal).
  • The rent: Rent can be charged at a fixed rate (a gross lease) or the tenant may have to pay additional costs (a net lease). Rent terms can specify how often rent must be paid, and whether or not there will be late payment charges or future rent increases.
  • Utilities and outgoings: The tenant may be required to pay directly for utilities or pay their share of the bill to the landlord. Outgoings (such as taxes, maintenance, or advertising services) may be passed on to the tenant or be covered by the landlord.
  • Building maintenance: Either the tenant or landlord may be responsible for maintaining the premises. You can also specify whether the tenant be allowed to make improvements to the property or not, and the kind of fixtures (items attached to the property, like lighting fixtures or plumbing) or chattel (moveable items, like tables and chairs) that will be included with the rented space.
  • Security deposit: Some landlords may require the tenant to pay a security deposit and to be present for property inspection reports.
  • Insurance: Either the tenant or the landlord can be held responsible for insuring the tenant’s contents, the landlord’s contents, the leased property, and personal injury on the property. Proof of insurance may be required.
  • Signing incentives: Landlords can provide incentives encouraging someone to sign the lease; for instance, the tenant could get a free month’s rent.

Related Documents:

  • Commercial Sublease: transfers a tenant's interest in a commercial lease to a new tenant for the remainder of the lease term, although the original tenant remains responsible for rent
  • Corporate Guarantee: holds an individual or corporation responsible for the debt or obligations of another party (debtor) if the debtor defaults
  • Purchase of Business Agreement: transfers ownership of a business' shares or assets from one party to another
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