Most business owners sign a lease the way they sign a phone contract. They check the rent, check the term, and assume the rest is standard. It isn’t. A commercial lease is usually the second biggest financial commitment a business makes after payroll, and almost every clause in it was drafted by someone acting for the landlord. This commercial lease checklist walks through the twelve clauses that actually move money and risk between the parties, what the Queensland rules say about each one, and what a reasonable tenant can ask for. Nothing here requires a fight. It requires asking before you sign, because after you sign the negotiation is over.
How to Use This Commercial Lease Checklist
Before you work through the clauses, find out which set of rules applies to you, because it changes your bargaining position on at least half of this list.
Queensland draws a hard line between a retail shop lease and an ordinary commercial lease. A retail shop lease is generally premises under 1,000 square metres used for a retail business listed in Schedule 1 of the regulation, such as a cafe, hairdresser or beauty salon, or any business sitting inside a retail shopping centre. If that is you, the Retail Shop Leases Act 1994 (Qld) gives you protections the landlord cannot contract out of. If you are leasing a warehouse, a standalone office, a gym or a medical centre, you are almost certainly outside that Act and the lease document is close to the only protection you have.
Everyone gets one more layer. The Property Law Act 2023 (Qld) commenced on 1 August 2025 and rewrote several parts of Queensland commercial leasing, particularly around landlord consent. Most lease precedents still in circulation were drafted before it, which comes up at clause 10 below.
1. Term and Options to Renew
Queensland does not impose a minimum lease term, so the length is whatever you negotiate. The instinct is to take the shortest term possible for flexibility, but that cuts both ways: a short term with no options means the landlord can decline to renew, and every dollar you spend on fit-out has to be recovered over a very short window.
The structure that usually works is a shorter initial term with one or two options to renew, which gives you the right to stay without the obligation. The trap is the exercise window. Options are strict. If your lease says you must give written notice between six and three months before expiry and you send it late, you can lose the right entirely. For retail shop leases, section 46 requires the landlord to remind you of the option deadline at least two months beforehand, but do not rely on that. Diarise the date the week you sign.
2. Rent Reviews and Ratchet Clauses
Rent almost never stays flat. The lease will set a review mechanism, usually a fixed percentage, CPI, or a market review at option points. Fixed increases of 4 or 5 per cent a year compound fast, so run the numbers across the full term including options before you agree to one. A 5 per cent annual increase on a five-year term means you finish paying roughly 22 per cent more than you started.
Watch for the ratchet clause. This is a provision saying rent can never fall below the previous year’s figure, which quietly converts a market review into a one-way bet. Section 36A of the Retail Shop Leases Act makes ratchet provisions void in retail shop leases. In an ordinary commercial lease there is no such protection, and landlords are free to include them. If you are negotiating a non-retail lease and you see one, that is a legitimate thing to push back on.
Check the market review process too. In a retail shop lease, if you and the landlord cannot agree within one month of the review date, a specialist retail valuer determines the rent and you split the cost. In a commercial lease you get whatever process the document sets out, so make sure there is one and that it involves an independent valuer rather than the landlord’s own number.
3. Outgoings
Outgoings are the building’s running costs passed through to you on top of rent: rates, water, insurance, body corporate levies, cleaning, security and management fees. They are the single most contested item in Queensland leasing. Outgoings featured in 22 per cent of the Queensland Small Business Commissioner’s mediations in 2024-25, and the reason is almost always the same: the tenant did not know what was included or how it was calculated.
Two things matter here. First, land tax. Section 7(3)(a) of the Retail Shop Leases Act excludes land tax from recoverable outgoings in a retail shop lease, along with insurance excesses and body corporate sinking fund contributions. In a non-retail commercial lease there is no such bar, and a landlord can pass land tax on if the lease says so. On a Gold Coast commercial building that is a serious annual figure, so find out whether it is in your outgoings before you sign.
Second, ask for a cap. A percentage cap on annual outgoings increases turns an open-ended liability into a budgetable one. Retail tenants should also receive an outgoings estimate at the start of the lease or a month before each period, plus an audited annual outgoings statement, typically by 30 September.
4. Incentives, Rent-Free Periods and Fit-Out Contributions
Incentives are normal in a soft leasing market and invisible if you do not ask. A rent-free period during fit-out, a contribution toward your fit-out cost, or a reduced rent for the first year are all standard asks, particularly on a longer term.
Read the clawback provision carefully. Most incentive clauses say that if you default or leave early, the incentive becomes repayable, sometimes in full rather than pro rata. A full clawback on a five-year deal you exit in year four is a nasty surprise. Push for the repayment to be proportionate to the time remaining, and make sure the trigger is a genuine unremedied default, not any technical breach.
5. Permitted Use and Exclusivity
The permitted use clause defines what you are allowed to do in the premises. Draft it too narrowly and you cannot add a product line, change your service mix or sell the business to a buyer who operates slightly differently. Ask for language broad enough to cover where the business is heading, not just what it does today.
Two practical checks. Confirm the local council actually approves your use for that site before you commit, because a lease does not override planning approval and the cost of a change of use application is yours. And if you are in a centre or a multi-tenanted building, ask about exclusivity. Without it, nothing stops the landlord leasing the next unit to a direct competitor.
6. Security: Bonds, Bank Guarantees and Personal Guarantees
The landlord will want security. In Queensland the amount is not regulated, so it is entirely a matter of negotiation, and it typically takes one of three forms.
A cash bond ties up working capital. A bank guarantee does not transfer funds, but your bank will usually require security behind it, so check whether it has an expiry date and who pays the bank’s fees. A personal guarantee is the one to think hardest about. If your tenant entity is a company, the landlord will often ask the directors to guarantee the lease personally, which puts your own assets behind the company’s rent obligations for the life of the lease and sometimes beyond it.
If a personal guarantee is unavoidable, negotiate its limits: cap it at a set dollar figure or a number of months’ rent, or have it fall away after a period of clean payment history. Note also that Queensland sets no legislated timeframe for returning commercial lease security. Bond return is governed by your lease, and make good disputes are the most common reason it gets held.
7. Fit-Out, Alterations and Landlord’s Consent
If the premises need work, the lease should record who does what, who pays, and what happens to the fit-out at the end. Get the landlord’s works into the document with a completion date rather than accepting a verbal promise that the air conditioning will be upgraded before you move in.
For alterations during the term, the lease will almost always require the landlord’s consent. Since 1 August 2025 the Property Law Act 2023 brings alterations into the same statutory consent framework as assignment, which is a meaningful improvement for tenants. Make sure the clause does not also make you responsible for the landlord’s legal and consultant costs without a cap.
8. Repairs and Maintenance
The dividing line you are looking for is structural versus everything else. As a tenant you would normally expect to maintain the interior and keep plant and equipment serviced. You would not normally expect to be responsible for the roof, the slab, the external walls or replacing a chiller that has reached the end of its life.
Many leases are drafted to blur that line, with obligations to keep the premises and all plant “in good repair and condition” full stop. That wording can leave you replacing capital items. Ask for structural and capital works to sit expressly with the landlord, and for your obligation to be qualified by fair wear and tear. Take dated photographs of the condition of everything on day one, including the air conditioning, roller doors, grease trap and electrical switchboard.
9. Make Good and Redecoration
Make good is the obligation to return the premises to an agreed condition when you leave, and it is where a lot of otherwise successful tenancies end badly. Under the Property Law Act 2023 the default position is that premises are returned in the same or better condition than at the start, and you are not liable for fair wear and tear or for damage the landlord has insured. But the lease can and usually does override that default, sometimes requiring a full strip-out back to base building.
The single most valuable thing you can do is prepare a condition report before you take possession, with photographs, even if the landlord does not provide one. Without evidence of the starting condition, an end-of-lease argument becomes your word against theirs while your bond sits unreturned.
Separate make good from redecoration, which requires work during the term such as repainting every three years. In a retail shop lease, a refurbishment or redecoration clause is unenforceable unless it sets out the nature, extent and timing of the work, so a vague obligation to refurbish “as reasonably required” should not survive.
10. Assignment and Subletting
This is your exit route, and it is the clause most people skip. If you ever want to sell the business, the buyer needs the lease, which means the landlord has to consent to an assignment. A restrictive assignment clause can cost you the sale.
Queensland improved this significantly. Under section 142 of the Property Law Act 2023, a landlord must not unreasonably withhold consent to an assignment, sublease, change of use, mortgage of your interest or alteration, and that duty cannot be excluded by the lease. The landlord has one month to respond once they have all the information they need, and if they refuse without good reason or simply go quiet, you can apply to the court. Section 144 also releases the original tenant and their guarantors from future liability once the lease has been assigned and then assigned again.
Those rights are the floor, not the ceiling. Negotiate the practical detail too: what information the landlord may demand, a cap on the legal costs you pay for their consent, and confirmation that your own guarantee ends on assignment. If a sale is anywhere in your plans, read this clause alongside the legal steps involved in selling a business.
11. Demolition, Relocation and Disturbance
Demolition and relocation clauses let the landlord end or move your tenancy early if they redevelop. They are common in shopping centres and older buildings, and they can wipe out years of remaining term and the fit-out investment behind it.
If one is in your lease, negotiate the conditions rather than accepting it as boilerplate: a long notice period, a genuine requirement that the redevelopment actually be approved and funded rather than merely proposed, compensation for your unamortised fit-out and relocation costs, and a right to comparable premises if you are being moved. Separately, ask what happens if building works disrupt your trading. Construction noise, scaffolding across your shopfront or loss of car parking can hurt revenue badly, and a rent abatement for significant disturbance is a reasonable thing to seek.
12. Damage, Insurance and Rent Abatement
The lease will set out who insures what. You will normally carry public liability, plate glass, contents and your own fit-out, while the landlord insures the building. Confirm the required cover levels early, because they affect your premiums, and check whether the lease makes you liable for the landlord’s insurance excess. In a retail shop lease, that excess cannot be passed to you.
Then read the damage and destruction clause. If a flood or fire makes the premises unusable, you should not be paying full rent for space you cannot occupy. The Property Law Act 2023 includes an implied covenant allowing rent and outgoings to be reduced or paused until the premises are usable again, and a matching covenant of quiet enjoyment. Make sure your lease does not narrow those further than the law allows, and that there is a clear termination right if the premises cannot be reinstated within a reasonable period.
Frequently Asked Questions
Do I need a lawyer to review a commercial lease?
You are not legally required to have a lawyer review an ordinary commercial lease, but for a retail shop lease it is effectively built into the process. If you are not a major lessee, you will be asked to give the landlord a signed legal advice report confirming a solicitor has explained the lease to you. Either way, a review is inexpensive relative to the value of the commitment. A five-year lease at $6,000 a month is a $360,000 obligation before outgoings.
What is the difference between a retail shop lease and a commercial lease in Queensland?
A retail shop lease is generally premises under 1,000 square metres used for a retail business listed in Schedule 1 of the regulation, or any business located within a retail shopping centre. Those leases are governed by the Retail Shop Leases Act 1994, which requires disclosure before signing, restricts what can be charged as outgoings, voids ratchet clauses and gives access to low-cost mediation. Ordinary commercial leases for warehouses, standalone offices, gyms and medical centres do not get those protections.
What is a disclosure statement and when should I receive it?
For a retail shop lease, the landlord must give you a draft lease and a disclosure statement at least seven days before you enter into the lease. The disclosure statement summarises the key commercial terms including rent, term, outgoings and any works. If the landlord does not provide it, you may have a right to terminate the lease within the first six months.
Can a landlord refuse to let me assign my lease?
Not unreasonably. Since 1 August 2025, section 142 of the Property Law Act 2023 requires a landlord to act reasonably when deciding whether to consent to an assignment, and that obligation cannot be excluded by the lease. The landlord has one month to respond after receiving the information they need, and you can apply to the court if consent is unreasonably refused or never given.
Can I actually negotiate a commercial lease, or is it take it or leave it?
You can negotiate almost all of it. Landlords and agents present leases as standard documents, but rent-free periods, fit-out contributions, outgoings caps, guarantee limits, make good scope and assignment terms are all routinely changed. The leverage sits with you before you sign and disappears the moment you do, so raise everything at once rather than clause by clause.
The Bottom Line
Very few lease disputes are about something the tenant did not understand. They are about something the tenant never read. Working through a commercial lease checklist before you commit costs a fraction of what it costs to argue about outgoings in year three or to lose a business sale because the assignment clause is too tight.
If you are reviewing a lease now, get the draft and the disclosure statement in front of a solicitor before you sign anything, including a heads of agreement or an offer to lease, since those can bind you more than you expect. Our commercial lease lawyers draft, review and negotiate leases for tenants across the Gold Coast, Brisbane and Byron Bay, with transparent fixed-fee pricing so you know the cost before we start. For wider context, our guide to commercial leasing for business owners is a useful companion piece, and if you are weighing leasing against buying, start with buying commercial property in Queensland.
Book a free 15-minute consultation and we will tell you what is worth negotiating in your lease and what is not.
This article is general information only and is not legal advice. Commercial leases turn on their specific terms and your circumstances, so please obtain advice tailored to your situation before signing.
