Why a lease – the commercial lease an essential contract?

Submitted over 8 years ago by Alan Barry

In this first installment of our blog on the commercial lease we will discuss why a formal lease agreement is important in the renting of a commercial property and who should be involved.

In contracts law we learn that contracts do not need to comply with any formalities and that an oral agreement can still be a contract.

When a contract is about property this is generally not true. All contracts have to be in writing. In NSW the Real Property Act 1900 stipulates an interest in land must be in writing. We also have the Property Stock and Business Agents Act 2002 which goes into great depth on written contracts. The Residential Tenancies Act 2010 and the Retail Leases Act 1994 all define and regulate leases between Landlord and Tenant but these are relevant to residential and retail properties.

When renting warehouses, offices, factories and other non retail or non residential property there is no specific act that regulates these contracts and they can be seen as a standard commercial contract between the Landlord and Tenant.

Solicitors and advice

Because the commercial lease is a commercial contract, there is a case to be made to employ a professional to draw up the lease agreement and implement the lease.

Standard commercial leases can be purchased, however because the lease agreement is always a product of a negotiation it is often not covered by a standard commercial lease therefore it is important to employ a solicitor and follow professional advice when drawing up a commercial lease.


The commercial lease is a commercial contract and should be drawn up by a solicitor with very few exceptions as this is not your typical real property agreement that is regulated by residential and retail property and consumer protection law.

Contact Alan Barry for more information on this topic

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