Commercial Lease Drafting
Commercial lease drafting is the preparation of a lease document that records the agreed deal between landlord and tenant and complies with the relevant retail or property legislation. We draft commercial leases, subleases, licences, incentive deeds, and disclosure statements for landlords and tenants across Australia. For an overview of all our leasing services, see commercial lease lawyers.
A well-drafted lease prices risk fairly, says exactly what each party must do, and stands up when things go wrong. A poorly drafted lease creates disputes that could have been written out at the beginning.
What we draft
- New commercial, retail, and industrial leases
- Sublease agreements and head lease consents
- Licence agreements (occupancy licences, shared workspace, pop-up)
- Heads of agreement and agreements to lease
- Incentive deeds (rent free, fit-out contribution, cash incentive)
- Lessor disclosure statements for retail premises
- Deeds of variation, extension, and renewal
- Deeds of assignment and surrender
- Personal guarantees and bank guarantee documentation
What goes into a commercial lease
A standard commercial lease has a schedule of key terms (parties, premises, term, rent, options, security) sitting in front of a longer set of operative clauses. The clauses we pay closest attention to when drafting:
Term, options, and renewal
How long the lease runs, how many options to renew, the length of each option, the window for exercising the option, and whether time is of the essence. We make sure the option mechanism is workable and that the rent on renewal is set in a way both sides can live with.
Rent and rent reviews
Fixed increases, CPI, market reviews, or a hybrid. We draft ratchet protection where appropriate (and where the relevant retail leases Act allows it), and make sure the review timing fits the option dates.
Outgoings
Which outgoings are recoverable, how they’re estimated and reconciled, what’s excluded (capital works, structural repairs, land tax in some states), and the audit rights. For retail leases we draft to the relevant Act’s outgoings rules.
Permitted use
Wide enough to cover how the tenant will trade, narrow enough to protect the centre or building’s tenant mix. We avoid the trap of a permitted use that needs landlord consent every time the business pivots.
Make good
Specific scope: strip out, paint and patch, base building, or full reinstatement. A vague make good clause is one of the most common sources of end-of-lease dispute.
Assignment, subletting, and change of control
When landlord consent is required, the conditions on consent, and what happens to guarantees on assignment.
Default, breach, and termination
Notice periods, cure periods, termination triggers, and re-entry rights. Drafted to align with the relevant state default regime.
Security
Bank guarantee or security deposit amount, the form, when it’s drawn on, and when it’s returned. Personal guarantees from directors where the tenant is a company.
Special conditions
Anything that changes the standard deal: rent free period, fit-out contribution, demolition clause, exclusivity, naming rights, signage, after-hours access, parking.
See: Special Conditions and Incentives
Heads of agreement
The pre-lease document that records the commercial deal. We draft the heads of agreement so the lease that follows it is consistent with what was negotiated.
See: Heads of Agreement
Demolition clauses
Clauses that allow the landlord to terminate the lease for redevelopment. We draft these to comply with the notice and compensation rules in the relevant retail leases Act.
See: Demolition Clauses
How we draft
- Understand the deal. We take a short brief on the commercial terms, the property, and any special conditions.
- Draft. A first draft within an agreed turnaround, in plain English where the legal substance allows.
- Internal review. Every lease is reviewed before it leaves the firm.
- Negotiation. We deal with the other side directly, marking up amendments and reporting back as positions move. See our lease negotiation service for detail on how we run this stage.
- Execution and registration. We arrange execution and, where relevant, registration of the lease at the state titles office.
Why use a lease lawyer rather than a template
Templates and agent-prepared leases routinely miss the clauses that matter most. The most common problems we see:
- Missing or non-compliant disclosure statement
- Outgoings clause that doesn’t actually allow recovery
- Rent review clause without ratchet, or with the wrong review type
- Make good clause too vague to enforce
- Permitted use too narrow or too broad
- Demolition clause that doesn’t comply with the Act
- Personal guarantee that doesn’t survive assignment
These aren’t theoretical: they show up at renewal, on default, or at the end of the lease, and they cost more to fix later than to draft properly the first time.
Frequently asked questions
How long does it take to draft a commercial lease?
Most standard leases take three to seven business days from instructions to first draft. Complex leases (large floor area, multiple incentives, unusual structures) take longer. Urgent turnarounds available where needed.
Can I use a template lease?
You can, but we don’t recommend it for any lease that commits the business to meaningful rent. Templates often miss state-specific compliance and the clauses that protect either side when there’s a problem.
Do I need a disclosure statement?
If the lease is a retail lease under the relevant state Act, yes. The landlord must give a prescribed disclosure statement before the lease is signed, and the timing varies by state.
Who pays for the lease drafting?
In a commercial (non-retail) lease, the parties usually share costs or the tenant pays. In a retail lease, most state Acts - including the Retail Leases Act 2003 (Vic) - prohibit the landlord from passing lease preparation costs to the tenant.
Can you draft incentive deeds?
Yes. We draft rent free, fit-out contribution, and cash incentive deeds, including any clawback for early termination.
Do you draft subleases and licences?
Yes. We draft both, including the head lease consent and any mirror clauses required.
Can you draft a lease that registers on title?
Yes. We draft and arrange registration of leases at the relevant state titles office where the term (including options) requires it.
How much does commercial lease drafting cost?
Fixed fees on most drafting engagements, scoped after we understand the deal. Send us the heads of agreement and we’ll come back with a quote within one business day.
Talk to a commercial lease drafting lawyer
Whether you need a single lease drafted or a portfolio refreshed, we draft to the deal and the relevant Act.