A lease isn’t just paperwork—it’s a binding Agreement at Law. One that could shape your business for years. Break it, and the costs could be heavy. Sign without care, and the terms could be used against you in a Court of Law.

Before you commit, understand what you’re agreeing to. These are the essentials:

1. Term of the Lease

Know how long you’re committing for the lease—3, 5, or 7 years duration? Will you have the right to renew the lease? If it’s not in writing, it’s not guaranteed. Without clear renewal rights allowing you to exercise option, you could lose your place just when business is blossoming.

2. Rent and Increases

What’s the rent now—and how will it rise? Some leases link increases to inflation or CPI. Others set fixed annual increases. At renewal, the landlord might require market rent review. Know it now, or pay more later.

3. Security

Landlords want protection. That usually means:

• A bank guarantee (often 3–6 months’ rent). A Bank Guarantee is, in essence, a solemn undertaking by a bank—issued at the request of the tenant and for the benefit of the landlord. It stands as a shield, ensuring that a specified sum shall be paid without hesitation or delay, should the lessor call upon it. Once properly invoked, the bank must honour the demand, whether or not the tenant protests or pleads injustice. The guarantee stands firm, unmoved by dispute, and answers only to the terms upon which it was issued.

• A personal guarantee—it is a firm and deliberate binding commitment. It stands as a second line of defence for the landlord, ensuring that if the tenant company should falter or fall, the guarantor may be called upon to answer the debt—personally and entirely—for rent unpaid, outgoings unmet, and losses sustained. Sign one lightly, and your home could be on the line.

Types of Leases

Commercial Leases

Used for offices, warehouses, and industrial properties. More freedom to negotiate—but less legal protection for the tenant. Terms vary. You need your lawyer to read the lease carefully.

Retail Leases

Used for shops in shopping centres or listed retail businesses. The Retail Shop Leases Act applies—offering extra protection, especially for tenants. Lessors must provide disclosure documents before signing.

Key Clauses 

No lease should be signed without fully understanding these terms—and getting legal advice:

Demolition / Redevelopment

Some leases let the landlord end your lease early if they want to knock the place down or rebuild.

Make Good Obligations

At the end of the lease, you may have to return the space to its original state—remove your fit-out, repaint, repair, deep-clean. These costs add up. 

Assignment / Subletting

Want to sell your business or share space? The lease must allow it—and most require landlord consent. Also, note: guarantors can remain liable, even after the lease is transferred, unless released in writing.

Outgoings

On top of rent, you might pay for the following to the lessor:

• Rates

• Water

• Cleaning

• Insurance

• Admin fees

A gross lease wraps most of this into rent. A net lease doesn’t. Always ask for a breakdown from Landlord.

Insurance

What must you insure? What does the landlord cover? Are there minimum cover requirements? 

Use of Premises

Just because the lease says you can operate your business doesn’t mean the council agrees. Always check zoning and approvals before signing.

Exclusivity. It is a term in a lease, crafted to ensure that a tenant’s trade shall not be undermined by rivals within the same centre. In plain terms, it forbids the landlord from leasing nearby premises to those who would carry on the same business, thereby cutting off competition at its root. Such a clause, when rightly drafted, shields a tenant from the encroachment of competitors in a shopping centre, arcade, or commercial precinct. It grants the tenant the exclusive right to offer a particular service or sell a particular kind of product. But the clause must be clear. The nature of the business protected must be stated without vagueness. The boundaries—physical and legal—must be fixed with certainty. For if there is room for doubt, there is room for dispute.

Should a landlord violate this protection—should they permit a competitor to set up under the same roof—they may find themselves in breach of contract, liable for damages, or forced to answer to a Court of Law. 

Early Termination for Redevelopment. Similar to demolition rights—this lets the landlord end the lease early to redevelop. 

Get Legal Advice Early

The biggest mistake? Waiting too long. If you only get advice after signing, it may be too late to fix the problem.

At Arshad Lawyers, we help clients across Brisbane and Queensland avoid costly lease mistakes by offering:

• Lease review and drafting

• Negotiation of lease terms

• Legal advice and disclosure reports

• Assistance with renewals, subletting, assignments, and disputes

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In Closing

A lease isn’t just a binding Agreement at Law —it’s the ground upon which your business stands, literally. Make sure it’s solid.

Think ahead. Ask questions. Get advice before you sign. A fair lease won’t just protect you today—it’ll give your business room to blossom.

Arshad Lawyers

Straightforward Legal Help for Landlords and Tenants in Brisbane and Across Queensland