What is the difference between a medical room licence and a commercial lease in Australia?

A medical room licence grants a practitioner the right to use consulting rooms for specified sessions or hours, without granting exclusive possession of the space. A commercial lease grants the tenant exclusive possession of defined premises for a term, attracting the protections of commercial tenancy legislation. The licence structure is preferred in medical settings because it: (1) allows the facility to manage scheduling and share rooms between practitioners; (2) makes clear the practitioner's independent contractor status; and (3) gives the licensor the ability to terminate the arrangement if the practitioner loses their AHPRA registration, without the procedural requirements of ending a tenancy.

Does a medical room licence create an employment relationship in Australia?

Not if it is properly structured. A medical room licence should clearly reflect an independent contractor arrangement — the practitioner sets their own hours, manages their own patient relationships, bills patients in their own name, and maintains their own professional indemnity insurance. If the practice owner begins to direct the practitioner's clinical activities, set their patient fees, or control their schedule, the arrangement may be reclassified as employment under the multi-factor test applied by the Fair Work Commission and courts. The consequences of mischaracterisation include liability for unpaid superannuation, annual leave entitlements, and potential penalties under the Fair Work Act 2009 (Cth).

What happens if a practitioner loses their AHPRA registration?

A medical room licence agreement should include an automatic termination clause that ends the licence immediately if the practitioner's AHPRA registration is suspended, restricted, or cancelled for any reason. Under the Health Practitioner Regulation National Law Act (which is in force in all states and territories), a practitioner whose registration is cancelled is prohibited from practising in the regulated health profession. Allowing a practitioner to continue using consulting rooms after losing registration would expose the licensor to regulatory liability. The practitioner must also immediately notify the licensor of any investigation, condition, or undertaking imposed on their registration.

Who owns the patient records under a medical room licence arrangement?

Patient record ownership in Australian medical room licence arrangements is one of the most contested issues in healthcare property law. The general legal position is that the practitioner who creates the record owns it — not the practice facility. This is consistent with the Australian Privacy Principles under the Privacy Act 1988 (Cth), which require the practitioner to give patients access to their own records. However, some licence arrangements use integrated practice management systems where records are stored on the licensor's server. In those cases, the agreement must clearly specify that the practitioner retains the right to access and copy all patient records on termination, regardless of which party's system they are stored in.

What infection control obligations apply to practitioners using medical consulting rooms in Australia?

All health practitioners using consulting rooms in Australia must comply with the NHMRC Australian Guidelines for the Prevention and Control of Infection in Healthcare (2019). These guidelines set out requirements for hand hygiene, standard and transmission-based precautions, management of sharps and clinical waste, instrument reprocessing, and environmental cleaning. Practitioners who perform procedures involving instruments that penetrate skin or mucous membranes must ensure those instruments are appropriately sterilised in accordance with AS/NZS 4815 (non-critical instruments) or AS/NZS 4187 (critical instruments). The medical room licence agreement should make compliance with infection control standards a binding contractual obligation.

Medical Room Licence Agreement (Australia) — Australia

Medical room licencing in Australia is one of the most legally complex property arrangements in the healthcare sector. It sits at the intersection of property law, health practitioner regulation, privacy law, tax law, and employment law — and getting the structure wrong can have serious consequences for both the practice owner and the practitioner. A Medical Room Licence Agreement grants a registered health practitioner the right to use consulting rooms at a medical facility for a defined schedule of sessions or on a full-time basis. Unlike a commercial lease, it does not grant the practitioner exclusive possession of the premises. This distinction is important: it keeps the arrangement within the licence framework rather than attracting commercial tenancy legislation, and it makes clear that the practitioner is an independent contractor — not an employee of the practice. The independent contractor characterisation is critical from both a tax and a Fair Work Act perspective. If the arrangement is structured incorrectly — with the practice directing the practitioner's clinical activities, setting their hours, or controlling their patient relationships — it may be reclassified as an employment relationship, with significant consequences for unpaid superannuation, entitlements, and liability. This template addresses the key provisions unique to Australian medical room licencing: AHPRA registration requirements, professional indemnity and public liability insurance minimums, patient records ownership and Privacy Act compliance, infection control obligations under the NHMRC guidelines, WHS compliance, Medicare and patient billing arrangements, and automatic termination on loss of AHPRA registration. Download as PDF or Word.

What Is a Medical Room Licence Agreement (Australia)?

A Medical Room Licence Agreement is a contract that grants a registered health practitioner (or their practice entity) the right to use consulting rooms at a medical facility for a specified access schedule and fee. In Australia, medical room licences are used across every branch of medicine and allied health — general practice, specialist medicine, physiotherapy, psychology, dentistry, chiropractic, podiatry, and occupational therapy, among others.

The critical legal characteristic of a medical room licence is that it grants access rights without conferring exclusive possession of the premises on the practitioner. This distinguishes it from a commercial lease and has three important practical consequences. First, it means commercial tenancy legislation — including the Retail Leases Act and other commercial leasing statutes in each state — does not apply. Second, it enables the facility to manage room scheduling across multiple practitioners, maximising utilisation of expensive consulting room infrastructure. Third, and most importantly in a healthcare context, it makes clear that the practitioner is an independent contractor who retains full clinical autonomy and professional responsibility for their patients.

The independent contractor distinction is not merely administrative — it has direct implications for Medicare billing compliance, professional indemnity insurance coverage, WorkCover obligations, and the superannuation guarantee. A poorly structured arrangement that inadvertently characterises the practitioner as an employee of the practice can result in significant unexpected liabilities for both parties.

This template is designed for use in all Australian states and territories and covers the full range of professional and regulatory obligations applicable to medical room licence arrangements under Australian law.

When Do You Need a Medical Room Licence Agreement (Australia)?

A Medical Room Licence Agreement is needed whenever a health practitioner uses consulting rooms at another party's facility — whether on a full-time, part-time, or sessional basis.

The sessional or part-time model is particularly common in specialist medicine and allied health. A dermatologist who consults from three different practice locations on different days of the week, a physiotherapist who shares rooms with a GP clinic, or a psychologist who uses a counselling room at a community health centre — all of these arrangements require a clear written agreement to avoid disputes about fee obligations, room availability, equipment responsibility, and what happens to patient records at the end of the arrangement.

The agreement is also critical when a practice is being established or restructured. Practice owners who are bringing in associate practitioners, or practitioners who are leaving hospital employment to set up or join a private practice, should have written agreements in place before the arrangement commences. The agreement protects the practice owner's investment in the facility and equipment, and protects the practitioner's rights to their patient base and records.

Full-time dedicated room arrangements also need written agreements. A practitioner who uses one room five days a week on what appears to be a permanent basis is in an arrangement that, without a clear written licence, may begin to look like an exclusive occupancy — raising the risk of a court characterising it as a lease or an employment relationship. A well-drafted licence agreement prevents that ambiguity by clearly setting out the nature of the arrangement, the access rights granted, and the independent contractor status of the practitioner.

What to Include in Your Medical Room Licence Agreement (Australia)

The key elements of an Australian Medical Room Licence Agreement reflect the unique intersection of property law, healthcare regulation, privacy law, and professional practice that characterises medical room licencing.

AHPRA registration requirement: The agreement must require the practitioner to hold and maintain current, unrestricted registration with AHPRA (or the applicable registration body for their profession) for the full term of the licence. Automatic termination on loss of registration is an essential protective provision for the practice owner.

Access schedule: The access schedule — whether full-time, part-time, or sessional — should be precisely specified. For sessional arrangements, the days and hours of each session should be set out in a schedule attached to the agreement.

Licence fee structure: The fee may be structured as a fixed monthly fee, a per-session fee, or (with careful legal advice) as a percentage of billings. Each structure has different tax and employment law implications. The agreement must specify the fee amount, payment frequency, GST treatment, and the process for fee increases.

Professional indemnity insurance: The required minimum professional indemnity insurance coverage must be specified — typically $10 million per claim for medical practitioners and $2–5 million for allied health practitioners, depending on the nature of the practice. Run-off cover requirements on termination should also be addressed.

Patient records and Privacy Act compliance: Ownership of patient records, access rights on termination, and compliance obligations under the Privacy Act 1988 (Cth), the Australian Privacy Principles, and applicable state health records legislation must be clearly stated.

Infection control: The specific infection control standard the practitioner must follow (NHMRC 2019 Guidelines, and relevant Australian Standards for instrument reprocessing) should be explicitly referenced.

Independent contractor status: The agreement should include an express acknowledgement that the practitioner is an independent contractor, responsible for their own tax, superannuation, insurance, and regulatory compliance obligations.

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