Landlord Obligations Under Commercial Leases In Australia

Signing (or renewing) a commercial lease can feel like a big win - you’ve found a location, you can picture customers walking in, and you’re ready to grow.

But the legal side matters just as much as the fit-out and the foot traffic. If you don’t understand your landlord’s obligations under a commercial lease, you can end up paying for things you assumed the landlord would handle, or stuck in a tenancy where essential repairs never get done.

This guide is written for Australian small businesses and tenants. We’ll break down what landlords are commonly responsible for, what can be shifted to you under the lease, and the practical steps you can take before you sign so you don’t get surprised later.

What Are Landlord Obligations Under Commercial Leases In Australia?

When people talk about landlord obligations under a commercial lease, they’re usually referring to the responsibilities a landlord has to provide and maintain the premises (to the extent required by the lease and law), and to act in a way that allows you to run your business from the space as intended.

In Australia, a landlord’s obligations come from a mix of:

• The lease itself (this is usually the biggest driver - commercial leases are often “contract-heavy”)
• State and territory leasing laws (especially if your lease is a “retail lease” under your state’s Retail Leases legislation)
• General legal principles (like not interfering with your lawful use of the premises)

A key point for small businesses: commercial leases in Australia are not “one size fits all”. Two leases for similar shops in the same suburb can allocate obligations very differently.

That’s why it’s so important to read the actual drafting, and not rely on assumptions like “the landlord will obviously fix that” or “outgoings are always handled the same way”.

If you want a clear view of what you’re signing up to, a Commercial Lease Review can be one of the most cost-effective steps you take before committing.

Key Landlord Obligations You Should Expect (And How They Usually Work)

Below are common areas where landlords often have responsibilities. The catch is that the lease can modify how these obligations operate - including shifting cost and responsibility to you.

Providing “Quiet Enjoyment” (No Unreasonable Interference)

Most commercial leases include an obligation that you can occupy the premises without unreasonable interruption by the landlord (often called “quiet enjoyment”).

In practice, this can relate to things like:

• the landlord not repeatedly entering the premises without proper notice
• not disrupting your trading hours with unnecessary works
• not cutting access to loading areas or customer entry without a proper process

Landlords can still access the property for inspections, repairs, compliance, or showing the premises to purchasers - but the lease usually sets out how and when.

Maintaining The Building And Structural Elements

Many tenants assume “the landlord handles the building”. Sometimes that’s true for structural items - but it depends on the lease (and, in some cases, the type of premises and any applicable retail leasing rules).

Structural obligations can include the roof, external walls, foundations, major plumbing to the building, and shared areas. However, some leases (especially for freestanding buildings or warehouses) can push broader maintenance responsibilities to tenants.

Practical tip: ask questions like:

• Who repairs the roof if it leaks?
• Who replaces a failed hot water unit or main electrical board?
• Is the air-conditioning considered the landlord’s plant, or the tenant’s responsibility?

The lease should answer these clearly - and if it doesn’t, that’s a negotiation point.

Common Areas, Access, And Essential Services

If you’re in a complex (shopping centre, medical hub, office building), the landlord generally controls common areas like corridors, lifts, bathrooms, car parks, and loading zones.

Landlord obligations in these areas often involve:

• keeping common areas reasonably clean and safe
• maintaining lighting and access
• ensuring essential services (like fire systems) are maintained

Even where the landlord is responsible for arranging these things, the costs may still be passed on to you as part of outgoings (more on that below).

Repairs Vs Maintenance Vs Replacement (The Words Matter)

One of the most common disputes we see is caused by vague drafting around:

• maintenance (keeping something in working order)
• repairs (fixing something that is broken or deteriorated)
• replacement (installing a new item when it can’t reasonably be repaired)

A lease might say the landlord will “maintain” an item, while you must “repair” it - or vice versa. Or it might say you’re responsible for all “repairs and replacements” of equipment “servicing the premises”, which could capture expensive items like HVAC.

If the premises has critical equipment (cool rooms, grease traps, exhaust, security shutters), make sure the lease clearly states who maintains, who pays, and what happens if replacement is needed.

Insurance Arrangements (And Who Pays)

Landlords typically insure the building. Tenants typically insure their contents, stock, and public liability (and sometimes plate glass).

However, who pays the building insurance premium (and whether it’s recoverable as an outgoing) can vary. If you want a clearer sense of how this works in practice, building insurance is a good example of an obligation that can be “landlord-managed” but “tenant-funded”.

Also check whether the lease requires you to note the landlord’s interest on your insurance policies, and whether you need to provide certificates of currency each year.

Outgoings, Maintenance, And Hidden Costs: Where Tenants Get Caught

If there’s one area that causes friction in commercial leases, it’s outgoings.

Outgoings are the costs of owning, operating, and maintaining the building or centre - and depending on your lease type and any applicable state/territory legislation, the landlord may be entitled to recover some or all of these costs from you.

Common Outgoings Clauses

Outgoings can include:

• council rates and water rates
• building insurance
• strata levies (for strata-titled premises)
• common area cleaning and security
• management fees
• repairs and maintenance to shared services

The practical question isn’t just “what are outgoings?” - it’s:

• Which outgoings are recoverable from you?
• How are they calculated (fixed, estimate, or actual)?
• When will you receive statements and adjustments?

Retail Lease Disclosure (If You’re Covered)

Many small businesses lease “retail premises” (even if you’re not in a shopping centre). If your lease is regulated under your state’s Retail Leases legislation, the landlord may have extra disclosure obligations and there may be restrictions around certain outgoings and recovery processes.

This matters because retail leasing laws are designed to reduce nasty surprises - but you only benefit from them if your premises and your use fall within the definitions.

If you’re unsure whether your lease is a retail lease, it’s worth getting advice before you sign (or before you exercise an option).

Make-Good: Not A “Landlord Obligation”, But It Can Control Your Exit Costs

When you leave, many leases require you to “make good” - usually restoring the premises to a specified condition.

Make-good can include removing your fit-out, patching and painting, reinstating ceilings and lighting, and sometimes returning the premises to “base building”.

Even though this is a tenant obligation, it’s closely linked to landlord obligations because it affects:

• what condition the landlord must provide the premises in at the start (if anything beyond the lease’s wording is promised)
• what condition you must return it in at the end
• what the landlord can claim from you (or your bond) if there’s a dispute

A practical move is to document the condition when you take possession - photos, videos, and a signed condition report if possible.

Safety, Compliance, And Repairs: Who Is Responsible For What?

Another major part of landlord obligations under commercial leases is compliance - but it’s rarely as simple as “the landlord is responsible for safety”.

Many obligations in this area are shared, split, or depend on who controls the relevant element (building vs tenancy, common area vs your shop, base building vs your fit-out).

Building Code And Essential Safety Measures

Commercial premises often need to comply with safety requirements such as:

• fire safety systems and evacuation requirements
• emergency lighting and exit signage
• access requirements (which may include disability access depending on the building and works)

Leases often push obligations onto tenants to comply with laws “as they apply to the premises”. That can be very broad, and it may create uncertainty about who pays if an upgrade is required.

As a tenant, it’s reasonable to ask:

• Is the building currently compliant?
• Who pays for compliance upgrades if standards change?
• Are there any known issues the landlord is already aware of?

Urgent Repairs And What To Do If The Landlord Doesn’t Act

If something critical breaks (for example, a burst pipe, major electrical failure, or roof leak), time matters. Most leases set out a process for notifying the landlord and, in some cases, allow you to arrange emergency repairs if the landlord can’t be reached.

The key is to follow the lease procedure closely, including:

• giving notice to the correct address or email
• keeping records of calls and communications
• keeping invoices and evidence of the urgency

If you’re facing ongoing issues and considering leaving early, it’s important to understand the exit risks. Many businesses only find out too late that walking away can trigger significant liability, which is why issues like breaking a commercial lease should be approached carefully and strategically.

Can The Landlord Pass Compliance Costs To You?

Sometimes yes - but it depends on the lease wording and (if applicable) whether retail leasing protections apply in your state or territory.

From a practical standpoint, you want the lease to clearly spell out:

• what costs are the landlord’s responsibility
• what costs are recoverable as outgoings
• what costs are your direct responsibility inside the premises

If those lines are blurry, disputes are more likely - especially when major repairs or upgrades come up mid-lease.

Assignment, Subleasing, And Lease Termination: What Landlords Must (And Don’t Have To) Do

Even if your lease starts smoothly, your business needs can change. You might outgrow the space, pivot your model, relocate, or sell the business.

That’s where it becomes crucial to understand what your landlord is required to do (and what they can refuse) when you want to change or exit the arrangement.

Assignment Of Lease (Common When You Sell Your Business)

If you’re selling your business, the buyer will often want to take over the lease. This is usually done through an “assignment of lease” process.

Landlord obligations here depend heavily on the lease wording and any applicable retail leasing laws. In some cases (particularly for retail leases in certain jurisdictions), landlords may need to follow specific procedures, provide reasons for refusal, and/or respond within set timeframes.

However, many leases still give landlords significant control, including the right to require financial information and impose conditions.

When an assignment is agreed, it’s typically documented in a Deed of Assignment of Lease, which is the formal document that transfers the tenant’s rights and obligations to the incoming tenant.

Subleasing (If Your Lease Allows It)

Subleasing can be a practical option if you have extra space or want to reduce overheads. But many leases require landlord consent, and some ban subleasing altogether.

Where it’s allowed, check:

• whether the landlord can withhold consent and on what grounds
• what documents the landlord requires
• whether you remain liable if the subtenant defaults (often yes)

Lease Termination And Notices

Lease termination is heavily driven by the wording of the lease. There may be termination rights for:

• non-payment of rent
• unremedied breaches
• insolvency events
• abandonment

Landlords generally must follow the notice and remedy process set out in the lease (and any applicable legislation) before taking enforcement steps.

If you’re receiving breach notices or worried about your lease ending, getting guidance early can help you avoid escalation. In higher-risk situations, lease termination advice can help you understand your options before you make a move that’s hard to undo.

Practical Steps: How To Protect Yourself Before You Sign The Lease

The best time to clarify landlord obligations is before you sign - while you still have leverage and options.

Here are practical steps you can take to reduce risk and improve certainty.

1. Ask For A Repairs And Maintenance Schedule (In Writing)

If the premises has major equipment (air-conditioning, exhaust systems, grease traps, roller doors), ask for a written schedule clarifying:

• what the landlord services
• what you service
• who pays for replacement
• service intervals and provider requirements

This helps avoid disputes where each side says “not my problem”.

2. Confirm Outgoings With Examples

Don’t just accept “outgoings estimated at $X per annum”. Ask for:

• a breakdown of what’s included
• last year’s actual outgoings (if available)
• how management fees are calculated

Even a rough sense of variability can help with cash flow planning.

3. Document Premises Condition On Day One

Take photos and videos as soon as you receive access, including:

• walls, floors, ceilings, and shopfront
• bathrooms and back-of-house areas
• air-conditioning units and visible plant
• any existing damage, leaks, cracks, or unsafe items

This makes make-good and “damage” arguments much easier to manage later.

4. Check The Lease Matches The Deal You Think You’ve Agreed To

It’s common for negotiations to happen by email or via an agent, and then the final lease doesn’t reflect what was discussed.

Look closely at:

• rent, rent-free periods, and incentives
• outgoings (especially anything “gross” vs “net”)
• options to renew and the timing to exercise them
• permitted use (make sure it fits your actual business)

If you’re putting a lease in place for the first time (or formalising an arrangement), it may be appropriate to properly document it as a Commercial Tenancy Agreement rather than relying on informal understandings.

5. Negotiate The Clauses That Drive Real-World Risk

You don’t need to negotiate every line. Focus on clauses that usually create major cost or operational issues, such as:

• repairs and replacement responsibilities
• outgoings and management fees
• make-good scope
• relocation clauses (common in shopping centres)
• landlord access rights
• assignment/sublease consent process

Small changes in these clauses can make a big difference over a 3-5 year term.

Key Takeaways

• Landlord obligations under commercial leases in Australia come from the lease terms, state/territory leasing laws (especially retail leasing rules), and general legal principles - so the fine print matters.
• Landlords may be responsible for structural elements and common areas, but many costs can still be passed on to you through outgoings (depending on the lease and any applicable retail leasing restrictions).
• Repairs, maintenance, and replacement are not the same thing - and unclear drafting in these areas is one of the biggest sources of disputes.
• Compliance and safety responsibilities can be shared or shifted depending on the lease and jurisdiction, so it’s worth clarifying who pays for upgrades and essential services.
• Assignment, subleasing, and termination are usually landlord-controlled processes; understanding consent requirements early can protect your ability to sell, relocate, or restructure.
• Before signing, focus on the clauses that drive real cost and operational risk: outgoings, repairs, make-good, access, and consent rights.

This article is general information only and is not legal advice. If you’d like advice on your commercial lease or landlord obligations as a tenant, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.