Commercial Tenancy Agreement Template In Australia: What To Include

Securing the right premises can be a turning point for your small business. Whether you’re opening a studio, moving into an office, or fitting out a warehouse, your lease will set the tone for your costs, risks and flexibility for years.

If you’re searching for a commercial tenancy agreement template, you’re not alone. Templates can be a helpful starting point - but they can also miss key protections (or include landlord-friendly terms you didn’t expect).

In this guide, we’ll unpack what a commercial lease should cover in Australia, when a template might be okay, how to tailor one safely, and the traps to avoid so you can lock in a fair deal with confidence.

What Is A Commercial Tenancy Agreement?

A commercial tenancy agreement (often called a commercial lease) is the contract between a landlord and a business tenant that sets out your right to occupy and use commercial premises.

It covers core terms like rent, term and options, outgoings, fit‑out and make good, permitted use, insurance, repairs, assignment and subletting, and what happens if things go wrong (defaults, termination and dispute resolution).

If you’re negotiating a new lease or renewing an existing one, it’s worth getting the structure and wording right from the outset. A well-drafted Commercial Tenancy Agreement clarifies who pays for what, limits nasty surprises, and reduces the risk of disputes during the tenancy.

Can You Rely On A Commercial Tenancy Agreement Template?

Short answer: sometimes - with caution.

A template can help you understand the typical clauses, organise your thoughts, and prepare for negotiations. It’s particularly useful when you need a working draft to start the conversation with a landlord or sublandlord.

However, templates are generic by nature. They don’t always reflect Australian state and territory rules, the specific premises (e.g. a shared warehouse vs a standalone retail store), or the commercial deal you’ve struck.

Common gaps we see in off‑the‑shelf templates include unclear rent review mechanisms, vague outgoings, missing make good rules, no process for landlord’s works and delays, and limited rights to assign or sublet when you grow. That’s why a targeted lease review can be invaluable before you sign.

Tip: If your premises fall within “retail” leasing laws in your state or territory, those rules override parts of the lease. In NSW, for example, the Retail Leases Act (NSW) imposes disclosure and other requirements that a generic template might not include.

Key Clauses To Include In A Commercial Lease

Every business is different, but most Australian commercial leases should address the following areas clearly and in plain English.

Term, Options And Start Dates

• Term: The length of your initial lease (e.g. 3 years).
• Options: Your right to extend (e.g. 2 x 3‑year options) and how to exercise them.
• Commencement: When rent starts and what happens if the premises or landlord’s works are delayed.

Rent And Rent Reviews

• Base Rent: Amount, frequency (monthly/quarterly) and whether GST applies.
• Reviews: How rent changes - fixed percentage, CPI, market review (with a process to resolve valuation disputes).
• Incentives: Any rent‑free period, fit‑out contributions or abatements should be documented, not just verbally agreed.

Outgoings And Operating Costs

• Clarity on what you pay: council rates, water, insurance contributions, cleaning, common area charges, management fees.
• Caps or exclusions: Consider negotiating caps on variable outgoings or excluding particular landlord expenses.
• Audit rights: A right to see statements supporting outgoings helps keep costs transparent.

Fit‑Out, Approvals And Make Good

• Fit‑Out: Who designs and pays, how approvals work, and timeframes for completion.
• Building Rules: Compliance with building codes, fire safety and landlord guidelines.
• Make Good: Exactly what you must do at the end (e.g. “return to base building condition” vs “fair wear and tear excepted”). Ambiguity here can be costly.

Use And Exclusivity

• Permitted Use: Broad enough to cover your current and foreseeable activities.
• Exclusivity: In multi‑tenant sites or centres, consider whether you need protection from direct competitors nearby.
• Compliance: Health, safety, signage, trading hours and noise rules if relevant to the location.

Repairs, Maintenance And Access

• Responsibilities: Who handles structural vs non‑structural repairs and how quickly.
• Access: Landlord’s right to enter for inspections or works, with reasonable notice and minimal business disruption.
• Services: Air‑conditioning, lifts, plumbing - service levels and response times matter to daily operations.

Insurance, Security And Guarantees

• Insurance: Public liability and contents insurance levels, cross‑waivers and certificate requirements.
• Security: Bond or bank guarantee wording, amount and return conditions.
• Personal Guarantees: If you lease through a company, check any director guarantee - it can expose personal assets.

Assignment, Subletting And Change Of Control

• Assignment/Sublet: Your ability to transfer the lease or sublet part of the premises as you scale.
• Reasonableness: Landlord consent should not be unreasonably withheld, with clear criteria and timeframes.
• Change Of Control: What happens if you sell shares or bring in investors - avoid clauses that trigger default unnecessarily.

Defaults, Termination And Disputes

• Breaches: Notice and cure periods for rent and non‑rent breaches.
• Termination: When each party can end the lease, and the consequences (including re‑entry and damages).
• Dispute Resolution: A practical process that encourages negotiation and, where relevant, retail leasing mediation.

Registration And Disclosure (Retail Leases)

• Registration: In some states, longer leases should be registered on title to protect your interest.
• Disclosure: Retail tenancies often require landlord disclosure statements and rules around fit‑out, outgoings, and marketing levies.

Retail Vs Other Commercial Leases In Australia

Many street‑front stores and shops in shopping centres are “retail” leases. These are governed by state and territory retail leasing legislation with extra protections for tenants (and obligations for landlords). Other premises (like offices, clinics and warehouses) are typically standard commercial leases without those special rules.

Why this matters:

• Upfront information: Retail leases usually require a landlord disclosure statement (and sometimes a tenant’s disclosure) before you commit.
• Recovery of costs: Certain outgoings and marketing fees may be restricted or require strict disclosure.
• Mediation: Retail leasing disputes often go to a specialist mediator or tribunal before court.

If you’re unsure whether your premises are “retail”, don’t guess. A quick check against your state’s rules (and a focused lease review) can save a lot of back‑and‑forth later.

Step‑By‑Step: How To Tailor A Template Safely

Using a commercial tenancy agreement template? Here’s a practical way to adapt it to your deal.

1) Confirm The Deal In Writing First

Start with a clear heads of agreement or email summary covering rent, incentives, term and options, permitted use, outgoings, fit‑out responsibilities and key dates. If the landlord proposes an “agreement for lease” (common where works are required), make sure it aligns with the commercial deal before you jump into the full lease. If a temporary or flexible arrangement suits the space (for example, coworking or short‑term use), a Property Licence Agreement might be a better fit than a full lease.

2) Check State/Territory Rules

Identify if your tenancy is “retail” and note any mandatory disclosures, term rules or prohibited clauses in your state. A template written for one jurisdiction may need tweaks for another.

3) Map The Template To Your Premises

Walk through the template clause‑by‑clause with your actual site in mind. For example, if air‑conditioning is shared in a multi‑tenant building, ensure maintenance and cost allocations reflect that reality. If your business needs after‑hours access or extra power, confirm it’s addressed.

4) Nail The Numbers And Timelines

Insert the correct rent, review method and dates, incentives, outgoings list and caps, security (bond or bank guarantee), insurance levels and key milestones (e.g. landlord works completion, fit‑out period, opening date). Vague numbers create disputes later.

5) Tighten Risk And Exit Clauses

Clarify default notice periods, termination rights and any early exit options. Consider your ability to assign or sublet as you grow, and tidy up change‑of‑control wording if you run the lease through a company.

6) Get A Legal Sense‑Check Before You Sign

Even if you’ve customised a template, a short legal check can highlight hidden risks, missing protections, or clauses that don’t reflect your deal. This is especially important if you’re asked to sign personal guarantees, or if the landlord’s form is heavily one‑sided. If you expect to assign later (for example, when you sell the business), it’s wise to ensure the Deed of Assignment of Lease pathway is practical from day one.

Common Pitfalls (And How To Avoid Them)

Templates can create a false sense of security. Watch for these common pain points.

Unclear Outgoings

Many tenants underestimate annual outgoings. Require a defined list, reasonable estimates, and a right to see supporting statements. Consider caps or exclusions where you can.

Open‑Ended Make Good

“Return to original condition” can mean different things to different people. Photograph the premises at the start, attach a schedule, and define exactly what make good involves (including whether you must remove services and cabling).

Limited Assignment Rights

If the clause requires “absolute discretion” from the landlord or burdens you with excessive conditions (e.g. full refit demands), push for “consent not to be unreasonably withheld” with clear criteria, timeframes and costs. This becomes critical when you sell or restructure your business.

Hidden Personal Liability

Director guarantees and broad indemnities can expose personal assets. If your business is a company, understand where liability sits, what the guarantee covers, and whether a lower‑risk option (like a bank guarantee) is available.

Retail Disclosure Gaps

Failing to follow retail leasing disclosure rules can delay your opening or invalidate parts of the lease. Build disclosure into your timeline and check local requirements early in the process.

No Written Lease

Operating on emails or a handshake is risky. A no lease agreement situation can cause real problems with rent increases, outgoings, exclusivity, access and fit‑out obligations - and makes resolving disputes much harder.

Ending The Lease Cleanly

Know the process for exercising options, giving notice, and returning the premises. If things aren’t working out, getting early lease termination advice can help you manage risks and negotiate an exit that protects your business.

Do You Actually Need A Template - Or A Tailored Lease?

If you’re the landlord (or sublandlord) granting space to multiple tenants, a tailored “house” lease often pays off quickly. It aligns with your building systems, outgoings structure and repair responsibilities, and reduces negotiation friction from deal to deal.

If you’re the tenant, using the landlord’s form is common - but negotiating an even‑handed result is the real goal. A tenant‑friendly template can help you compare versions and propose balanced wording. Where the landlord’s form is non‑negotiable, a focused mark‑up and concessions list can still land you crucial protections (e.g. outgoings caps, workable make good, practical assignment rights).

For short‑term, part‑time or flexible arrangements (pop‑ups, shared studios), consider whether a licence is more suitable than a lease. A short‑form Property Licence Agreement can achieve the outcomes you need without locking you into long lease obligations.

What Happens If Your Business Changes?

Businesses evolve. You may expand, sublet unused space, or sell the business. Good leases anticipate change with sensible assignment and subletting rights, consent processes and costs that aren’t prohibitive.

If you’re transferring to a buyer, make sure the sale contract aligns with your lease obligations and timing. Preparing early for assignment (including the landlord’s information requirements) smooths completion. Where an option period is approaching, consider whether exercising the option before or after the sale gives you more certainty - and check any retail leasing rules around options in your state.

Key Takeaways

• A commercial tenancy agreement template can be a helpful starting point, but you’ll still need to tailor it to your premises, deal and state or territory rules.
• Lock in the commercial terms first (rent, incentives, outgoings, options, fit‑out), then ensure the lease wording reflects that deal precisely.
• Don’t overlook essentials like rent reviews, outgoings detail, make good, assignment/subletting, insurance levels and bank guarantees.
• If your premises are a shopfront, retail leasing laws may apply and override generic template wording, including disclosure and cost recovery rules.
• A short, targeted lease review before signing can catch hidden risks, save money on outgoings and make your exit and growth options more practical.
• If your needs are temporary or flexible, a Property Licence Agreement may suit better than a full lease, and if you plan to sell later, make sure assignment is workable from day one.

If you’d like a consultation on preparing or reviewing a commercial tenancy agreement for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.