25 Lease Terms Every Tenant Should Know

Signing a commercial lease can feel overwhelming—especially when you’re focused on running your business. One moment you’ve found the ideal space, and the next you’re navigating complex lease documents filled with legal jargon. Whether you’re searching for an office, retail tenancy or medical suite for lease across Brisbane, understanding the key lease terms can be the difference between securing a strong deal and facing unexpected costs or limitations down the track.

Commercial leases in Australia differ significantly from residential agreements. They are detailed legal contracts that can impact your cash flow, operational flexibility, and long-term business growth. The good news is that with the right knowledge, you can confidently negotiate terms that align with your business goals. At Tewksbury Commercial, we guide our clients through this process to ensure they make informed decisions from the outset.

Lease Term

The lease term outlines how long you are committing to the premises. For retail and medical spaces, this typically ranges from three to ten years, depending on the property and landlord. It’s important to strike the right balance—too short may disrupt your growth, while too long could limit flexibility if your needs change.

Option Periods

Options provide the right (but not the obligation) to extend your lease beyond the initial term. A common structure is a three-year lease with two additional three-year options. Without options in place, you have no guaranteed right to remain once the lease expires.

Base Rent

This is your primary rental cost, usually expressed as an annual figure plus GST. Ensure the lease clearly outlines what is included and what costs are additional, allowing for accurate financial planning.

 Rent Reviews

Rent reviews determine how and when your rent increases. These may be fixed increases, CPI adjustments, or market reviews. Understanding this mechanism is essential, particularly for long-term leases where increases compound over time.

Market Review

A market rent review is a clause in a commercial lease that resets the rent to the current open market value.  In a true market review, the rent can ither increase or decrease.  The market review is conducted once option is exercised.

Outgoings

Outgoings are additional costs such as council rates, insurance, maintenance, and building management. The lease should clearly define which outgoings you are responsible for and how they are calculated.

Permitted Use

This clause specifies how the premises can be used. For flexibility, broader definitions such as “office”, “retail”, “medical” or “health services” are preferable over highly specific uses.

Fit-Out Provisions

Fit-out clauses govern your ability to modify the premises. This is particularly important for medical tenants who may require specialised installations. Ensure clarity around costs, approvals, and ownership of improvements.

Make-Good Obligations

Make-good clauses outline the condition the premises must be returned in at the end of the lease. These obligations can vary significantly, so it’s important to understand potential end-of-lease costs upfront.

Assignment Rights

Assignment allows you to transfer your lease to another party, often when selling your business. Clear terms and reasonable landlord consent provisions are essential.

 Subletting

Subletting enables you to lease part or all of your premises to another party while remaining responsible under the head lease. This is common in medical centres with multiple practitioners.

Bond /Bank Guarantee

Landlords typically require a bond equivalent to several months’ rent. The lease should outline the conditions for its return at the end of the tenancy.

Personal Guarantee

Directors are often required to personally guarantee the lease. This places personal assets at risk and should be carefully considered.

Insurance

Tenants are usually required to hold public liability and contents insurance, and contribute to the landlord’s building insurance via outgoings.

Trading Hours

Retail and medical tenants should ensure permitted trading hours align with their operational needs, particularly in shopping centres.

Signage Rights

Signage is critical for visibility. The lease should outline your rights, approval processes, any restrictions and make good requirements.

Exclusive Use

An exclusive use clause can prevent direct competitors from leasing within the same property, offering valuable business protection.

Renewal Notice Period

Strict deadlines apply when exercising lease options. Missing these can result in losing your right to renew.

Landlord’s Consent

Many actions require landlord approval. Ideally, the lease should state that consent cannot be unreasonably withheld.

Dispute Resolution

A clear dispute resolution process can save time and legal costs if issues arise.

GST Treatment

Ensure it is clear whether rent and outgoings are quoted inclusive or exclusive of GST.

Disclosure Statement

Retail leases require a disclosure statement prior to signing, outlining key terms and costs to assist with informed decision-making.

Registration

Registering your lease can provide additional legal protection, particularly for longer terms.

Redevelopment Clause

A Redevelopment or Demolition Clause gives a landlord the legal right to end a tenant’s lease early or move them to a new space. This happens if the owner plans to do major building work, renovations, or demolition that needs an empty property.  Ensure the notice period to vacate provides you with enough time to find a new premises.   If you have spent significant costs on a fit out, you can request the Landlord provide you financial compensation if Demolition Clause is activated.

Getting Your Lease Right from the Start

Commercial leases should never be rushed. Whether you’re launching a new business, expanding, or relocating within Brisbane, understanding these key terms puts you in a strong position to negotiate effectively.

At Tewksbury Commercial, we work closely with our clients to simplify the leasing process and ensure every detail is carefully considered—because the right lease sets the foundation for long-term success.