Last Updated February 28, 2024
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.
