Agreement · Commercial Property & Leasing
Heads of agreement for a commercial or retail lease (non-binding, subject to formal lease)
Non-binding heads of agreement recording the commercial terms of a proposed lease, with limited binding clauses, drafted to avoid an unintended agreement to lease and to manage the retail leasing traps.
- Kind
- Agreement. A contract between two or more parties.
- Where it applies
- New South Wales
- AI use
- Yellow AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at
- 17 October 2026
- Status
- Maintained. Checked against the cited sources on 17 October 2026.
- Version
- 1
- Source
- Written for this library
When to use it
Use once the landlord and tenant have agreed the main commercial terms and before the formal lease is drafted. Do not use where the parties want an immediately binding agreement for lease; draft a full agreement for lease instead.
How AI may be used
AI may populate the schedule from the negotiation emails and flag gaps; a lawyer settles the non-binding and binding clauses and checks that conduct has not overtaken the drafting.
AI may
- Extract the agreed commercial terms from emails and term sheets into the schedule, with the source message for each.
- List terms that are missing, inconsistent or still marked "to be agreed".
- Compare the heads of agreement with the later draft lease and list differences.
AI must not
- Must not change the non-binding and binding clauses without lawyer approval.
- Must not describe the document to the client as binding or non-binding without the lawyer's advice on the facts.
- Must not send the document to the other side.
The lawyer checks
- The "subject to formal lease" drafting is clear and consistent throughout, including in covering emails.
- No access, keys, fit-out or payment is given before the lease is signed unless documented in a licence or the binding clauses.
- For a retail shop, the disclosure statement timetable has been considered.
Method: how the Green, Yellow and Red levels are decided. This is guidance for planning, not legal advice.
Read the full text
The full text is for signed-in accounts. It is free. When you sign in you can:
- read the whole precedent, with its drafting notes beside it;
- copy it, or download it as a Word file or Markdown;
- add it to your firm’s knowledge base, so colleagues can find it;
- let the AI tools you connect read it from that knowledge base.
The summary, the law it rests on and the AI-use guidance above stay public. Privacy.
More in Commercial Property & Leasing
- Retail lease disclosure statements: NSW lessor's and lessee's statement (official form), with Victorian and Queensland notes
- Notice to remedy breach of lease before re-entry (Conveyancing Act 1919 (NSW) s 129 notice)
- Letter of advice to a tenant on a proposed commercial or retail lease (NSW)
- Verification checklist for AI-generated lease abstracts and critical-date reports
- Lease clause: smart-building data, surveillance devices and AI analytics
All precedents for Commercial Property & Leasing · Tasks and AI use in this area