What Is a Commercial Lease? A Complete Guide for Business Owners

Introduction

Leasing a property is one of the most important steps for any business owner. Whether you are setting up a new office, opening a warehouse, or expanding into new premises, your lease agreement will directly affect your financial security and business flexibility.

But what exactly is a commercial lease, and how does it differ from a retail shop lease or other types of agreements? In this guide, we’ll break down everything business owners need to know about commercial leases in Queensland.

What Is a Commercial Lease?

A commercial lease is a legally binding agreement between a landlord (lessor) and a tenant (lessee) that gives the tenant the right to occupy a premises for business purposes.

Commercial leases typically cover premises such as:

• Offices

• Warehouses

• Factories

• Industrial units

• Non-retail business spaces

Unlike retail shop leases, which are regulated by the Retail Shop Leases Act 1994 (Qld), commercial leases generally fall outside this legislation. Instead, they are governed by the lease contract itself and the general law (including property and contract law); and other related legislation.

Why Commercial Leases Matter

Signing a commercial lease is often one of the largest financial commitments a business will make. The terms can:

• Lock you into long rental obligations

• Define who pays for repairs, maintenance, and outgoings

• Affect your ability to assign, sublease, or exit early

• Impact your ability to renew and stay in the same premises long-term

A poorly negotiated lease can lead to disputes, unexpected costs, or even threaten your business viability.

Key Features of a Commercial Lease

Here are the most common terms and clauses found in a commercial lease:

• Term of the Lease - The length of time the tenant has the right to occupy the premises (e.g., 3, 5, or 10 years).

• Rent and Rent Review - How much rent is payable. How and when rent is reviewed (fixed increases, CPI adjustments, or market rent reviews).

• Outgoings - Expenses the tenant may be required to contribute.

• Use of the Premises - Defines what type of business activity is allowed. Restrictions may apply.

• Repairs and Maintenance - Who is responsible for repairs (structural vs. non-structural). Tenant’s obligations to maintain fitout and keep the premises clean.

• Fitout and Alterations - Rules for making changes to the premises (e.g., installing partitions, signage, or equipment).

• Assignment and Subletting - Whether the tenant can transfer the lease (assignment) or sublease to another business.

• Options to Renew - Gives the tenant the right (not obligation) to extend the lease for another term.

• Make Good Obligations - Requirements at the end of the lease, usually to “make good” the premises to its original condition.

Why You Should Always Get Legal Advice

Commercial leases are complex documents that heavily favour landlords. Small details buried in the fine print can have long-term financial consequences for your business.

At Greyson Legal, we:

• Review and negotiate lease terms to protect your interests

• Explain obligations in plain English

• Advise on risks such as rent reviews, make good, and outgoings

• Assist in lease disputes, renewals, and assignments

Commercial Lease vs Retail Shop Lease

Feature	Commercial Lease	Retail Shop Lease
Legislation	Governed by general law and contract; and other relevant legislation	Retail Shop Leases Act 1994 (Qld)
Typical Premises	Offices, warehouses, factories	Shops in shopping centres or retail precincts
Disclosure Statements	Not required	Required for both lessor and lessee
Protections for Tenants	Limited	Stronger statutory protections

Need help reviewing or negotiating your commercial lease?

Greyson Legal are experts in leasing law across Brisbane, Sunshine Coast, Redcliffe, and Tasmania. Contact us today to protect your business and secure the best possible lease terms.

📞 Call now: 0411 248 885 📧 Email: mail@greysonlegal.com