This Commercial Lease Agreement can be used when a commercial property is being rented from a landlord (or lessor) to a tenant (or lessee). This is not designed for retail leases (see the discussion of the differences between retail leases and commercial leases, below).
For commercial properties (that are not affected by retail tenancy legislation), this Lease will provide a quick and easy way to outline all of the terms of the agreement between the parties.
This Lease will create a legally binding contract between the parties, outlining the rights and responsibilities of both the landlord and the tenant. This lease contains a number of variable terms, including:
Risks with long term leases
For long term leases (usually over 5 years, or over 10 years) the parties may need to pay close attention to laws relating to subdivisions in the relevant state or territory. This may be found in conveyancing legislation or in planning legislation. In some cases, leases over a certain length of time are deemed to be subdivisions, according to that legislation.
As a result, the parties may be found to have subdivided land without the appropriate planning approvals. This can lead to prosecution and fines. In addition, a court may refuse to uphold such a lease, meaning that the tenant may be released from the obligation to pay rent.
If in doubt, the parties should seek legal advice.
What are the differences between a commercial lease and a retail lease?
Each state and territory in Australia has specific legislation which says that some types of commercial property can only be rented through a "retail lease" (rather than a general commercial lease). The law also imposes more restrictions on retail leases than it does for commercial leases.
The exact requirements for retail leases vary from one state or territory to the other, but it is often a question of the size of the property being leased and/or what it is going to be used for. In general, retail shops and similar businesses are likely to be affected by "retail leases". Other commercial property such as scrap yards or warehouses may not be affected.
Landlords who have property that fits within this retail tenancy legislation must only rent the property out using a retail lease. They are likely to face penalties if they fail to do this.
Therefore, it is important to determine whether or not the property being rented is going to be affected by the retail tenancy legislation in the relevant state or territory. Each state and territory government has an office or department that deals with fair trading or small business matters, (such as the "Small Business Commissioner" or the office of "Consumer Affairs and Fair Trading"). This is usually a good place to go for information about retail leases in the relevant state or territory.
How to use this document
The completed document should be provided to all parties (including any guarantors, if applicable). Each party should be given the opportunity to read the agreement, and may need some time to do this given the length of the document.
The parties will all then need to sign the document. Each party should keep a validly signed copy of the agreement.
The tenant will then need pay the rent and any security deposit on or before the dates as provided in the agreement.
Any applicable law
The various retail tenancy legislation in each state and territory affects some commercial leases.
This commercial lease is a contract between the landlord and the tenant, and as such, general principles of contract law, as provided by the common law, will apply.
For long term leases, legislation dealing with subdivisions in the relevant state or territory may be relevant. Laws dealing with subdivisions are often contained in conveyancing legislation or planning and land use legislation.
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