A commercial lease which has been prepared by commercial lease lawyers will ensure certainty concerning rent, termination, use of premises, outgoings, and other essential terms.

What is a commercial lease?

It is important to ensure that landlords and tenants have the correct type of lease. Different types of leases have varying legal implications and drafting considerations. A commercial lease is between two commercial parties, and is not a retail lease. Retail leasing legislation can be quite complicated, and it is important that lessors and lessees receive expert legal advice to ensure that they enter into the right type of lease and do not breach legislative provisions.

What should a commercial lease include?

A commercial lease should balance the rights of the landlord and tenant and should address numerous circumstances that may arise during the term of the lease, such as a default on payment of the rent or any damage to the premises.

The lease must outline the rights and obligations of both the landlord and the tenant, as well as outlining the commercial terms of the lease. Such terms include:

  • The amount of rent payable;
  • The term of the lease;
  • Any renewal option periods;
  • The type of security that the lessee will need to provide (e.g. a bank guarantee);
  • The maintenance obligations of each party;
  • Permitted use of premises;
  • Provisions in the event of the tenant’s default on rent payment;
  • Termination provisions;
  • “Make good” requirements, which may require tenants to repair any damage that occurred during their tenancy and return the property to its condition prior to tenancy (with the exception of fair wear and tear).

Lease preparation and negotiation

Ordinarily, the landlord will arrange for the lease to be prepared and will then provide a draft lease to the tenant. At this stage, the tenant should review and negotiate the terms of the lease. A commercial lease may contain a provision where the tenant will reimburse the landlord for the costs associated with the costs of preparing, negotiating and registering the lease.

A lease is a costly agreement to enter into and should be drafted by commercial lease lawyers. Our lease lawyers are experienced at drafting leases for all Australian jurisdictions. To talk to our expert lawyers call us on (02) 4929 7002, or email us at enquiries@butlers.net.au.

Commercial Lease FAQs

If a lease agreement is contemplated between two commercial parties, you may be entering into a commercial lease. It is important to ensure that the nature of the arrangement does not fall under retail leasing, which is complicated and strict.

Commercial lease rights and obligations differ from those contemplated in residential and retail leasing. In particular, extensive forms of security are often required from the lessee in a commercial lease. In addition, permitted use of the premises, maintenance, and ‘make good’ obligations are specifically identified in commercial lease agreements.

As the landlord ordinarily prepares and provides a draft lease to the tenant, it is important that the draft lease protects the landlord’s interests. A commercial leasing lawyer can ensure that the draft lease outlines favourable termination and default provisions.

Normally, the landlord will prepare and provide a draft lease to the tenant. The tenant may have the opportunity to negotiate the commercial lease terms. As a commercial lease can favour the landlord, a lawyer can help change the bias to favour the tenant, and explain each party’s rights and obligations under the commercial lease.

In addition to the commercial lease agreement, a commercial leasing lawyer might assist with general commercial agreements, agency agreements, confidentiality and non-disclosure agreements, and franchising agreements. What is needed will depend on your particular circumstances.


“Butlers prepared standard contracts for every-day use in our business. The team ensured that the contracts complied with Australian Consumer Law and advised on best practices for PPSR registration. Their experience and knowledge in this complicated area was invaluable, and we feel that our business now has the best protection from expensive legal disputes.”


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Want to talk to one of our experienced commercial lawyers? Call us on (02) 4929 7002, email us or complete an enquiry form.

Want to talk to one of our experienced commercial lawyers? Call us on (02) 4929 7002, email us or complete an enquiry form.