Commercial lease agreements unpacked
Commercial lease agreements are entered into by landlords and tenants to allocate the legal rights and obligations which each party has in respect of the leased premises, the building in which the premises are located, and the land on which the building is situated.
Commercial lease agreements straddle two legal domains because they are both a commercial contract and an estate or interest in property, being land. That means that the legal doctrines and principles of both contract law and property law apply to all commercial lease agreements. Equity also applies to commercial lease agreements, and serves to temper the rigours and inflexibility of the common law (of contract and or property).
There are 2 distinct types of commercial lease agreements – retail shop lease agreements and commercial lease agreements.
A commercial lease agreement is an agreement between landlord and tenant about premises that are located in a commercial building. Whereas, a retail shop lease agreement is used for a retail shop located in a group of shops or a shopping centre. Retail shop leases form a discrete subset of all commercial lease agreements, and are specifically governed by the Commercial Tenancy (Retail Shops) Agreement Act 1985 (WA) and regulations.
By contrast pure commercial lease agreements (i.e. not retail shop lease agreements) are governed by the usual legislative suspects, being the Property Law Act 1969 (WA) and The Transfer of Land Act 1893, and at times unusual legislation, such as, the Unfair Contracts Terms in the Australian Consumer Law (ACL), which extend to small businesses, along with other parts of the ACL, the Commercial Arbitration Act 2012, and the Planning and Development Act 2005, amongst other legislation