Commercial Lease Agreement (Australia)
This Commercial Lease Agreement (the "Lease") is made on [Lease Date] in [State/Territory], Australia.
1. PARTIES
1.1 Landlord: [Landlord Name], ABN [Landlord ABN], of [Landlord Address], email [Landlord Email] (the "Landlord").
1.2 Tenant: [Tenant Name], ABN [Tenant ABN], of [Tenant Address], email [Tenant Email] (the "Tenant").
2. PREMISES AND PERMITTED USE
2.1 The Landlord leases to the Tenant the premises described as: [Premises Address] (the "Premises").
2.2 Description: [Premises Description].
2.3 Permitted Use: The Tenant must use the Premises only for the purpose of [Permitted Use] and for no other purpose without the Landlord's prior written consent. The Tenant must not use the Premises in a way that contravenes any planning law, zoning requirement, or building code applicable to the Premises.
2.4 The Tenant must obtain and maintain all licences, permits, and approvals required to operate its business from the Premises.
3. LEASE TERM
3.1 Commencement Date: [Commencement Date].
3.2 Initial Term: [Lease Term].
3.3 Expiry Date: [Expiry Date].
3.4 If the Tenant remains in possession of the Premises after the expiry of the Lease without the Landlord's consent, the Tenant holds over as a monthly periodic tenant on the same terms as this Lease (except the term), until terminated by either party giving one month's written notice.
4. RENT AND PAYMENT
4.1 Base Rent: The Tenant must pay the Landlord annual base rent of AUD $[Annual Base Rent] (plus GST), payable [Rent Frequency] in advance.
4.2 GST: Rent and all other amounts payable under this Lease are stated exclusive of Goods and Services Tax (GST). The Tenant must pay GST of 10% in addition to the base rent and all other amounts subject to GST under the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (GST Act). The Landlord must provide a valid tax invoice for all GST-inclusive amounts.
4.3 Payment Method: Rent must be paid by [Payment Method].
4.4 Time: Time is of the essence with respect to all payment obligations under this Lease.
5. RENT REVIEW
5.1 Review Mechanism: The base rent will be reviewed by [Rent Review Method].
5.2 Review Details: [Rent Review Details].
5.3 Ratchet Clause: Unless otherwise required by the applicable Retail Leases Act, rent will not decrease as a result of any rent review.
5.4 For CPI reviews: The CPI figure used will be the Consumer Price Index (All Groups) for the capital city of [State/Territory] as published by the Australian Bureau of Statistics.
6. OUTGOINGS
6.1 Outgoings Structure: [Outgoings Type].
6.2 Tenant's Outgoings Contribution: [Tenant Outgoings].
6.3 The Landlord must give the Tenant an annual estimate of outgoings before the start of each lease year and a reconciliation statement within three months after the end of each lease year. Any excess paid by the Tenant will be credited; any shortfall will be payable within 14 days of the reconciliation statement.
6.4 To the extent applicable, outgoings excludes land tax, capital expenditure on the building structure, and costs relating to other tenants' fit-outs.
7. SECURITY
7.1 The Tenant must provide to the Landlord, on or before the commencement of the Lease, a [Security Type] in the amount of AUD $[Security Amount] (plus GST) as security for the due performance of the Tenant's obligations under this Lease.
7.2 The Landlord may draw on the security if the Tenant is in breach of any obligation under this Lease after the expiry of any applicable notice period. The Tenant must top up the security to the full amount within 10 business days of any draw.
7.3 The security (or balance thereof) will be returned to the Tenant within 30 days after the end of the Lease, provided the Tenant has performed all of its obligations, including make good.
8. MAINTENANCE AND REPAIRS
8.1 Landlord's Obligations: The Landlord must maintain the structure of the building (including roof, external walls, and foundations), essential services, and common areas in good repair and condition.
8.2 Tenant's Obligations: The Tenant must maintain the interior of the Premises, including all fixtures, fittings, plant, and equipment installed by the Tenant, in good repair and condition throughout the Lease term, fair wear and tear excepted.
8.3 The Tenant must not make any alterations or additions to the Premises without the prior written consent of the Landlord. Any approved alterations become the property of the Landlord at the end of the Lease unless the Landlord directs removal.
8.4 Essential Services: The Landlord must ensure that essential services (water, electricity, and essential building services) are maintained in working order.
9. MAKE GOOD
9.1 At the expiry or earlier termination of this Lease, the Tenant must, at its cost: [Make Good Obligations].
9.2 The Tenant must remove all of the Tenant's property, signage, fittings, and equipment from the Premises before the last day of the Lease. Any items not removed may be disposed of by the Landlord at the Tenant's cost.
9.3 The Tenant must allow the Landlord access to inspect the state of the Premises prior to the end of the Lease for the purpose of providing a make good schedule.
10. ASSIGNMENT AND SUBLETTING
10.1 The Tenant must not assign, transfer, or sublet this Lease or grant any licence over the Premises except: [Assignment Conditions].
10.2 Any assignment or subletting requires the Tenant to remain liable under the Lease unless the Landlord expressly releases the Tenant in writing.
10.3 For retail leases, any refusal of consent to an assignment will be subject to the requirements of the applicable Retail Leases Act.
11. INSURANCE
11.1 The Tenant must maintain, at its own cost throughout the Lease term:
- Public liability insurance for a minimum of AUD $[Public Liability Amount] per occurrence, noting the Landlord as an interested party;
- Workers' compensation insurance as required by law;
- Insurance over the Tenant's fit-out, stock, plant, and equipment for their full replacement value;
- Any other insurance required by law or specified by the Landlord.
11.2 Additional insurance: [Additional Insurance].
11.3 The Tenant must provide the Landlord with evidence of all required insurance policies upon request and within 5 business days of any renewal of those policies.
12. DEFAULT AND TERMINATION
12.1 If the Tenant defaults in the payment of rent or other money for more than 14 days after it falls due, or breaches any other term of this Lease and fails to remedy the breach within 14 days of written notice (or such longer period as is reasonable in the circumstances), the Landlord may re-enter the Premises and terminate this Lease.
12.2 Termination of this Lease does not release the Tenant from liability for rent and other amounts owing up to the date of termination, or for damages resulting from the Tenant's breach.
12.3 The Landlord must take reasonable steps to mitigate its loss following termination.
13. GENERAL PROVISIONS
13.1 This Lease is governed by the laws of [State/Territory], Australia, and the parties submit to the exclusive jurisdiction of the courts of [State/Territory].
13.2 Any dispute must first be referred to mediation by either party before proceedings are commenced in a court or tribunal, unless urgent injunctive relief is required.
13.3 This Lease constitutes the entire agreement between the parties with respect to the subject matter and supersedes all prior agreements, representations, and negotiations.
13.4 This Lease may only be varied by written agreement signed by both parties.
EXECUTION
This Lease is executed by the parties as follows:
LANDLORD
[Landlord Name]
ABN: [Landlord ABN]
TENANT
[Tenant Name]
ABN: [Tenant ABN]
Landlord
________________
Signature
Date: ________________
Tenant
________________
Signature
Date: ________________
What Is a Commercial Lease Agreement (Australia)?
A Commercial Lease Agreement in Australia grants a tenant the right to occupy commercial premises and fixes the rent, term, outgoings, and repair obligations between landlord and tenant, governed by the Real Property Act 1900 (NSW).
Australia does not have a single national commercial leasing law. Instead, each state and territory has its own legal framework. For retail premises, the applicable Acts include the Retail Leases Act 1994 (NSW), the Retail Leases Act 2003 (VIC), the Retail Shop Leases Act 1994 (QLD), the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), and the Retail and Commercial Leases Act 1995 (SA). These Acts provide mandatory protections for retail tenants including minimum disclosure requirements, restrictions on certain outgoings, minimum lease terms (in some states), dispute resolution mechanisms, and limitations on the landlord's ability to refuse consent to assignment.
For non-retail commercial premises (offices, warehouses, industrial properties), the lease is largely a matter of private negotiation between the parties, subject to general contract law principles, the GST Act, and any applicable planning or building laws. In practice, commercial leases in Australia follow standard market conventions developed by the Law Society and Real Estate Institute in each state.
Key features of an Australian commercial lease include the definition of the permitted use (which must comply with planning zoning), the rent payable and GST treatment, the mechanism for rent review (CPI, fixed percentage, or market), outgoings contributions, the security deposit or bank guarantee, make good obligations at the end of the lease, restrictions on assignment and subletting, insurance requirements, and any option to renew the lease for a further term.
The legal framework governing the Commercial Lease Agreement (Australia) in Australia draws on several key statutes and regulatory bodies. Under state and territory residential tenancies legislation, including the Residential Tenancies Act 1997 (Vic), Residential Tenancies Act 2010 (NSW), and equivalent Acts in other jurisdictions, tenancy tribunals (NCAT in NSW, VCAT in Victoria) adjudicate disputes. The Real Property Act 1900 (NSW) and Transfer of Land Act 1958 (Vic) govern property registration through state land registries. Section 52 of the Australian Consumer Law (Schedule 2, Competition and Consumer Act 2010) prohibits misleading conduct in property transactions. The Foreign Acquisitions and Takeovers Act 1975 (Cth) requires FIRB approval for foreign purchasers. Parties executing a Commercial Lease Agreement (Australia) in Australia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Real Property Act 1900 (NSW) sets the foundational requirements.
When Do You Need a Commercial Lease Agreement (Australia)?
A Commercial Lease Agreement is required whenever a landlord grants a business tenant the right to occupy commercial, retail, or industrial premises in Australia in exchange for rent. This includes arrangements for retail shops, restaurants, cafes, offices, warehouses, factories, showrooms, medical suites, and any other business premises.
You should use a commercial lease agreement when entering into any arrangement for the use of business premises that will last more than one month. Even for shorter-term arrangements, a written agreement is strongly advisable to record the agreed terms and protect both parties.
Commercial lease agreements are essential in the following situations: when a business is setting up a new location and needs to formalise the arrangement with the property owner; when a landlord is renting out a commercial or retail property and needs to document the terms, including rent, permitted use, and security arrangements; when the lease is expiring and both parties wish to document the terms of a renewal or new arrangement; and when a business is acquiring another business that operates from leased premises, requiring an assignment of the existing lease.
For retail premises, additional protections apply under the state Retail Leases Acts. In New South Wales and Queensland, the landlord must provide a mandatory disclosure statement to the tenant at least seven days before the lease is entered into (or a shorter period if the tenant waives this right). Failure to provide the mandatory disclosure statement can give the tenant the right to terminate the lease within a specified period. It is therefore critical that both parties understand whether the Retail Leases Acts apply to their arrangement before the lease is executed.
Parties in Australia should prepare a Commercial Lease Agreement (Australia) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under state and territory residential tenancies legislation, including the Residential Tenancies Act 1997 (Vic), Residential Tenancies Act 2010 (NSW), and equivalent Acts in other jurisdictions, tenancy tribunals (NCAT in NSW, VCAT in Victoria) adjudicate disputes. The Real Property Act 1900 (NSW) and Transfer of Land Act 1958 (Vic) govern property registration through state land registries. Section 52 of the Australian Consumer Law (Schedule 2, Competition and Consumer Act 2010) prohibits misleading conduct in property transactions. The Foreign Acquisitions and Takeovers Act 1975 (Cth) requires FIRB approval for foreign purchasers. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Commercial Lease Agreement (Australia)
A well-drafted Australian Commercial Lease Agreement should address all key commercial terms as well as the legal requirements of the applicable state legislation.
The parties and premises section must correctly identify the landlord and tenant by their full legal names and, where they are companies, their Australian Company Numbers (ACNs) and Australian Business Numbers (ABNs). The premises must be described with precision, including the address, floor area, and any inclusions such as parking, storage, or common areas. The description of permitted use is critically important — it should be specific enough to define what the tenant can do in the premises while broad enough to accommodate the tenant's business activities without requiring variations in the future.
The term and option section sets out the initial lease period and any right of the tenant to renew for a further term. In states where the Retail Leases Acts apply, the combined initial term and option periods may need to meet a minimum requirement. The option to renew should specify the period of notice required and the conditions for exercise (including no existing breach).
The rent and GST section must state the base rent (exclusive of GST), the payment frequency, and the method of payment. All commercial rent in Australia is a taxable supply for GST purposes, and the landlord must issue valid tax invoices. The rent review section must specify the review mechanism (CPI, fixed percentage, or market), the review dates, and any ratchet clause preventing rent reduction.
The outgoings section is a key commercial term that distinguishes gross leases (where the landlord bears all outgoings) from net leases (where the tenant contributes to operating costs). Under the Retail Leases Acts of some states, certain outgoings — including land tax, capital expenditure on the building structure, and costs relating to other tenants — cannot be passed on to retail tenants.
The security section documents the type and amount of security (bank guarantee or cash security deposit) required, the conditions under which the landlord may draw on it, and the obligation to return it at the end of the lease. Make good obligations, insurance requirements, and assignment conditions are all key terms that should be clearly negotiated and documented to avoid disputes at the end of the lease.
Additional compliance elements for a Commercial Lease Agreement (Australia) used in Australia include: Under state and territory residential tenancies legislation, including the Residential Tenancies Act 1997 (Vic), Residential Tenancies Act 2010 (NSW), and equivalent Acts in other jurisdictions, tenancy tribunals (NCAT in NSW, VCAT in Victoria) adjudicate disputes. The Real Property Act 1900 (NSW) and Transfer of Land Act 1958 (Vic) govern property registration through state land registries. Section 52 of the Australian Consumer Law (Schedule 2, Competition and Consumer Act 2010) prohibits misleading conduct in property transactions. The Foreign Acquisitions and Takeovers Act 1975 (Cth) requires FIRB approval for foreign purchasers. Forms-legal.com provides this template as a starting point for Australia-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Commercial Lease Agreement (Australia) (Australia) [Legal document template]. Forms Legal. https://forms-legal.com/australia/real-estate/leases/commercial-lease-agreement-australia
"Commercial Lease Agreement (Australia) (Australia)." Forms Legal, 2026, https://forms-legal.com/australia/real-estate/leases/commercial-lease-agreement-australia.
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year = {2026},
howpublished = {\url{https://forms-legal.com/australia/real-estate/leases/commercial-lease-agreement-australia}},
note = {Free legal document template. Based on Real Property Act 1900 (NSW)}
}Also available for these jurisdictions:
Frequently Asked Questions
Yes, in several Australian states the Retail Leases Acts prescribe minimum lease terms for retail premises. In New South Wales, the Retail Leases Act 1994 requires that a retail shop lease must be for a minimum of 5 years, including any options. In Victoria, the Retail Leases Act 2003 also provides protections for retail tenants but does not mandate a specific minimum term. In Queensland, the Retail Shop Leases Act 1994 requires a minimum term of 5 years (including options) if the tenant has made a significant capital investment. In Western Australia and South Australia, similar protections apply under the respective Retail Shops Acts. It is important to check the applicable state legislation when drafting a commercial lease for retail premises, as the mandatory disclosure requirements, minimum terms, and restrictions on outgoings vary significantly.
Yes. Commercial rent is subject to Goods and Services Tax (GST) at the rate of 10% under the A New Tax System (Goods and Services Tax) Act 1999 (Cth). The landlord must be registered for GST and must issue a valid tax invoice for each rental payment. The tenant can claim an input tax credit for the GST paid on rent, provided the tenant is registered for GST and uses the premises for a business activity. Residential rent is GST-free, but all commercial and retail leases are taxable supplies. The base rent stated in a commercial lease is typically expressed as a GST-exclusive amount, with GST payable in addition. Both landlord and tenant ABNs should be recorded in the lease for GST compliance purposes. Under Australia law, Real Property Act 1900 (NSW), parties should seek independent legal advice from a qualified lawyer to confirm compliance with all applicable requirements. Under state and territory residential tenancies legislation, including the Residential Tenancies Act 1997 (Vic), Residential Tenancies Act 2010 (NSW), and equivalent Acts in other jurisdictions, tenancy tribunals (NCAT in NSW, VCAT in Victoria) adjudicate disputes. The Real Property Act 1900 (NSW) and Transfer of Land Act 1958 (Vic) govern property registration through state land registries. Forms-legal.com provides this template as a starting point for Australia-compliant documentation.
Make good obligations require a tenant to return the leased premises to a specified condition at the end of the lease term. The scope of make good obligations is a heavily negotiated term in Australian commercial leases and varies widely. At minimum, a make good clause will require the tenant to repair any damage and leave the premises clean. More extensive make good obligations may require the tenant to remove all fit-out and return the premises to 'base building condition' — meaning the original shell without any improvements made by the tenant. In some cases, landlords have agreed to waive make good requirements in exchange for a cash payment (a 'make good payment'). Australian courts will strictly enforce make good clauses, and tenants can face significant liability if they fail to comply. The scope of make good obligations should be carefully negotiated and clearly defined in the lease.
A bank guarantee (also called an unconditional undertaking) is a written promise by an Australian bank to pay the landlord a specified amount on demand, without the landlord needing to prove that the tenant has breached the lease. Bank guarantees are the security instrument of choice for most Australian commercial landlords because they are liquid (can be called upon immediately), they do not rely on the financial standing of the tenant, and they avoid the legal complications of a disputed cash security deposit. Unlike a cash bond in a residential tenancy, there is no state authority holding commercial security deposits — the landlord holds or has access to the bank guarantee directly. The amount of a bank guarantee is typically equivalent to three to six months' rent (plus GST and outgoings) in Australian commercial leases. A personal guarantee from the tenant's directors is often required in addition to the bank guarantee, particularly for smaller companies or new businesses.
Australian commercial leases typically provide for rent reviews at regular intervals (usually annually or at the commencement of any option term). The three most common mechanisms are: (1) Fixed percentage increase — rent increases by a set percentage (e.g. 3% per annum) on each review date, providing certainty for both parties; (2) CPI review — rent increases by the percentage change in the Consumer Price Index (All Groups) for the relevant capital city as published by the Australian Bureau of Statistics, linking rent to inflation; and (3) Market rent review — an independent valuer determines the current market rent for comparable premises, which is then applied from the review date. Many leases include a 'ratchet clause' preventing rent from falling below the previous rent even on a market review. Under the Retail Leases Acts of some states, the method of rent review must be disclosed to the tenant in the mandatory disclosure statement before the lease is signed.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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