Australia: Agreements for Lease

Last Updated: 22 July 2016
Article by Sara Hatcher

Entering into a Lease is one of the biggest business commitments many tenants make. Understanding the provisions in both the Lease, and any preceding Agreement for Lease, is essential for avoiding potentially serious and costly consequences as either a tenant or landlord. This article provides an overview of the difference between a Lease and an Agreement for Lease, discusses when an Agreement for Lease might be used and introduces some matters routinely covered within Agreements for Lease.

What is a Lease?

A Lease grants an interest in land and/or buildings by granting to a tenant the right to exclusive occupation and use of the premises.  A Lease does not need to commence immediately – it can be for a future time-period; however, all of the components considered necessary to grant the Lease should be able to be determined with certainty when the Lease is signed.  In reality it is not always possible to have the required level of assurance over all such variable elements in advance of signing; in these instances an Agreement for Lease is deemed necessary.

What is an Agreement for Lease?

An Agreement for Lease is a contract between the landlord (or lessor) and the tenant (or lessee) in which the landlord agrees to grant a Lease to the tenant at a future date, on the terms and conditions set out in the Agreement for Lease.  The Agreement for Lease (with a copy of the actual Lease to which it refers, attached) allows for future completion of any variables in the Lease that cannot be determined at the date the parties –landlord & tenant - enter into the Agreement for Lease.

When would an Agreement for Lease be used?

Agreements for Lease are generally used in circumstances where there are conditions to be satisfied before the actual Lease can commence.  Common situations necessitating use of an Agreement for Lease include:

  • A tenant has agreed to lease premises that are not yet constructed
  • The landlord has agreed to carry out works on behalf of the tenant
  • The tenant needs to obtain the consent of someone prior to using the premises

Matters routinely covered in an Agreement for Lease

Agreements for Lease deal with a range of different matters too numerous to cover fully in this brief introduction; however, some of the more common subjects include 'Fit-out work', 'Consents to use' and 'Incentives', each of which is explained further here:

Fit-out works

Key issues dealt with in most Agreements for Lease are construction of premises, subdivision of land to create premises and fit-out of premises.  Where premises are yet to be constructed or land subdivided, then the following important considerations may be set out in the Agreement for Lease:

  • A mechanism for determining the exact area of the premises
  • A calculation to determine the rental amount in circumstances where the parties have agreed to a rental based on a rate per square metre
  • A mechanism for determining the commencement date of the lease*
  • A mechanism for governing the scope and standard of the works being carried out*
  • Any sunset date by which the landlord must complete the works, failing which the tenant will be entitled to terminate the Agreement for Lease*
  • Any mechanism by which the sunset may be extended to take into account external build factors such as inclement weather, industrial action and Council consents*

Where premises have already been constructed but the landlord is undertaking certain fit-out works for the tenant, points asterisked (*) above are of particular importance.

Consents to use

Where tenants intend using premises for specific purposes other than merely being commercial offices, consent from the local Council may be required, as well as other consents in specific circumstances such as childcare centres and liquor-licenced premises.

In such circumstances it is critical that the lease of the premises is subject to the tenant obtaining those consents, regardless of whether the consents are facilitated by the landlord or are the tenant's responsibility.  Both parties must carefully consider and agree who is responsible for acquiring relevant consents and the impact any delay in getting those consents will have on the commencement date of the lease or any other factors.

In addition, the issue of any head lessor or mortgagee consent that may be required should also be considered in the Agreement for Lease, as well as the costs involved in obtaining those consents.


It is common practice for landlords to offer tenants an Incentive (e.g. rent-free period, contribution to fit-out or removal expenses) encouraging them to enter into a Lease of premises.  Incentives can often be quite valuable and for long-term leases can amount to 20% or more of the total rent payable by the tenant under the lease.  Incentives are generally covered within an Agreement for Lease only when that Agreement for Lease is being created for other purposes (e.g. Consents, Fit-out).  If there are no other specific reasons for drawing-up an Agreement for Lease substantial incentives would, in that circumstance, usually be handled within an Incentive Deed; for smaller incentives, the parties may elect to cover the details within the actual Lease itself, saving on legal costs associated with drafting and negotiating a separate deed, although that is generally not an appealing option for a landlord as that document will, in many states, be available for public inspection.

Important considerations to be documented in relation to Incentives are:

  • The form the incentive will take such as rent free or fit-out contribution
  • The trigger for payment of or provision of the incentive
  • Any limitations on payment or provision of the incentive such as breach of the lease
  • Any repayment requirements for the incentive in circumstances where the lease is terminated early or assigned.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Sara Hatcher
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.