What is a Commercial Lease Agreement?

A Commercial Lease Agreement is a contract between a landlord and a tenant that sets the terms for renting a commercial property for business use, such as an office, retail store, or warehouse. 

It outlines each party’s rights and responsibilities throughout the lease term and provides landlords and tenants with flexibility to negotiate rent, responsibilities, and lease length. 

Also known as a:

• Commercial real estate rental agreement

• Commercial rental agreement

• Business property rental agreement

• Commercial tenancy agreement 

Our Commercial Lease Agreement is tailored to the governing laws of all Australian states and territories.

Commercial vs Residential Leases

Both commercial and residential leases enable property rental, but they serve different purposes. Here’s how they differ at a glance:

Commercial Lease legislation across Australia

Commercial and retail lease laws differ between Australian jurisdictions. Each state and territory has legislation that governs the creation, renewal, and enforcement of commercial leases.

Before signing any agreement, review the Act relevant to your location:

Please note: This summary is for general information purposes, and may not fully include the latest amendments. Always check the current version of your jurisdiction’s law, or seekprofessional legal advice.

Types of commercial properties

LawDepot’s Commercial Lease Agreement can be customised for a range of business property types, such as:

• Industrial buildings: Factories, workshops, or production spaces.

• Office spaces: Individual suites or full corporate offices.

• Retail stores: Shops and boutiques (some may qualify as retail leases).

• Restaurants: Premises selling food and beverages.

• Warehouses: Distribution or storage facilities.

• Other properties: Commercial kitchens, commissaries, or co-working facilities.

If you need a lease for personal housing, consider using a Residential Tenancy Agreement instead.

Benefits of using a Commercial Lease Agreement

A Commercial Lease Agreement helps you establish your business on a stable foundation by setting clear terms and expectations.

Key benefits include:

• Legal and financial stability: Establishes a clear framework that defines key terms like rent, payment frequency, and security deposit. 

• Mutual transparency: With all terms outlined, both parties understand their commitments and can set clear expectations from the outset. 

• Reduced chance of disputes: Clearly documenting responsibilities and property details helps prevent misunderstandings and offers straightforward paths to resolution should issues arise.

• Protection for both parties: If either party fails to meet their financial or legal obligations, the agreement provides accountability and a basis for recourse.

Key components of Commercial Lease Agreements

You can tailor your LawDepot commercial lease to include essential terms and provisions such as:

• Lease type: Fixed-term or periodic, continuing until one party ends the agreement. 

• Rent details: Fixed (gross lease) or variable (net lease); lease renewal and rent review options.

• Utilities and outgoings: Allocation of responsibility for utilities, taxes, and maintenance. 

• Sublets and lease assignments: Permissions and conditions for subleasing or lease transfer. In these cases, tenants may use a Commercial Sublease Agreement.

• Maintenance or improvements: Responsibilities for upkeep and property changes can be assigned to either party; includes details on allowed alterations and how fixtures or chattels are handled. 

• Security deposit: Amount and inspection conditions.

• Insurance: Requirements for property and liability coverage, and the determination of what contents are covered. 

• Signing incentives: Perks (e.g., a free rental period or covered broker fees) to encourage signing. 

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

How to create a Commercial Lease Agreement template

Create and customise your PDF in a few simple steps:

1. Enter property details

Provide the property address, type, permitted use, and other relevant details such as competitor restrictions, parking access, and pet policies.

When you provide these details, you can also include any additional specifications (such as the property's boundaries) to add clarity and potentially reduce the risk of future disputes.

2. Set lease terms

Determine whether the lease will be fixed term, month‑to‑month, or year‑to‑year, and specify the start and end dates. Additional terms to clarify include early possession conditions and renewal options.

Key rental terms to include:

• Rental type (gross or net)
• Payment frequency and amount
• Payment due date
• Rental payment address
• Rental increase terms
• Late payment charges
• Prepaid rental terms
• Security deposit details
• Utilities and other expenses
• Tax responsibilities
• Insurance responsibilities

3. Add landlord and tenant details

Specify key information about the landlord and the tenant.

For landlords, indicate whether the landlord is an individual or a company/organisation. Then, provide their full name, address, and phone number. If needed, you may add multiple landlords.

For tenants, similarly, determine whether the tenant is an individual or a company/organisation. Also include their full name, operating name (if any), address, and phone number.

If there are multiple tenants, provide their information as well.

To clarify what will happen if a tenant does not pay rent, you can add a guarantor—a person who agrees to pay the landlord directly for any losses should the tenant fail to pay rent or otherwise breach the lease agreement.

Please note: A guarantor cannot be one of the tenants.

4. Add any final details and additional clauses

Include any custom terms or circumstances that may not already be covered in LawDepot’s questionnaire.

For example, you might specify property improvements the landlord or tenant will undertake, such as installing new HVAC systems or refurbishing the carpet.

These additional clauses help ensure your lease is fully tailored to your business needs and property arrangements.

5. Review and sign

Carefully review your completed lease details.

Optional: Include the intended signing date, if you already know it.

Once everything is finalised, securely sign your Commercial Lease Agreement using eSign, a convenient way to electronically formalise your document without scanning or printing.