The 2025 Commonwealth National Leasing Suite: what you need to know for successful property leasing

Commonwealth leasing is now subject to a revised suite of templates, following the release on 15 September 2025 by the Department of Finance (Finance) of the updated Commonwealth National Leasing Suite (CNL Suite).

The CNL Suite was first introduced in 2011 and is designed to assist Commonwealth entities in undertaking lease negotiations for office premises. Containing a set of standardised templates and provisions which set out the Commonwealth's preferred policy and risk positions, it was last updated in 2019. Finance has been carrying out a further review with various stakeholders since late 2024 (Clayton Utz assisted Finance).

The revised Suite reflects the updated Green Lease Schedules and Energy Management Plans released earlier this month as well as the results of the 2025 Review.

The elements of the 2025 version of the CNL Suite

The key document in the CNL Suite is the Commonwealth National Lease (CNL) supported by a broader range of documents, including:

• CNL User Guide**;

• Heads of agreement template;

• Deed of surrender of lease;

• Deed of assignment of lease;

• Divestment guide;

• Sublease;

• Memorandum of Understanding for an "assignment" of Commonwealth leased property between non-corporate Commonwealth entities**;

• Memorandum of Understanding for a "sublease" of Commonwealth leased property between non-corporate Commonwealth entities**;

• Cost Benefit Analysis for Lease Endorsements template;

• Deed in relation to Strategy Property Advisor Services of the Commonwealth of Australia (SPA Deed)**; and

• Deed in relation to Property Services to the Commonwealth of Australia (PSP Deed)**.

** these documents are available to Commonwealth entities only and are not published on the Department of Finance website.

Following the 2025 Review, there is also now a new short form CNL and Memorandum of Understanding for "tenancy sharing" of Commonwealth leased property between non-corporate entities.

Use of the CNL Suite is not mandatory for corporate or non-corporate Commonwealth entities, although its use is encouraged as the documents contain the Commonwealth's preferred position in leasing transactions. Commonwealth tenants will need to continue to tailor the CNL and documents in the CNL Suite to meet their particular requirements and circumstances.

Key changes to the Commonwealth National Lease

While many clauses and concepts remain unchanged, subject only to minor tidy-ups and clarifications, there have also been more significant changes to the CNL, including many environmental updates to align the CNL obligations with the requirements of the Commonwealth's Net Zero in Government Operations Strategy.

Outgoings

The Commonwealth has changed its preferred lease from a gross lease to a semi-gross lease meaning that the payment of statutory outgoings is now the default position. The alternative template Outgoings provision which was included in the CNL User Guide has now been inserted at item 19 of the Reference Schedule and clause 23. This provides that all rates, charges, assessments (excluding land tax) payable by the Landlord to an authority responsible for provision of water, sewerage, fire protection or drainage services and any other utilities to the Land are now recoverable as outgoings.

Commonwealth entities and property service providers (PSPs) should be cognisant of the following issues:

• Statutory outgoings are still one of many different available approaches to outgoings, and a gross lease remains an alternative option. Parties should consider what is best for them, and address the scope of outgoings (if any) as part of commercial negotiations.

• PSPs should be careful when estimating and calculating rental figures, as the methodology to be utilised differs between a proportion of statutory outgoings, as opposed to a gross lease, a percentage of increases in outgoings or full building outgoings being payable.

• Payment of a percentage of statutory outgoings may not represent the best value for money depending on the market in which the lease is situated. By way of example statutory fees in Canberra can be significant, and payment of a percentage of these fees may increase whole of life cost.

• The type of Green Lease Schedule which will apply will vary depending on whether the lease is a gross or net lease.

Electric vehicle parking

The car parking licence clauses have been updated to require the parties to identify if any of the licensed bays contain electric vehicle charging points, and if so, contain a right for the Commonwealth tenant to utilise that infrastructure. The Tenant is responsible for paying for electricity consumed or used by using the electric vehicle charging, subject to the confirmation on how those charges are calculated or separately metered.

Waste

New clause 30.4 entitles the Tenant to make its own waste and rubbish disposal arrangements with alternative vendors.

Net zero compliance

A new clause 31.2 has been inserted requiring the Landlord to provide to the Tenant a certificate certifying the building is compliant with the applicable NABERS rating within three months of the Commencement Date and subsequently on an annual basis throughout the Term. The Commonwealth's minimum NABERS requirements are set out in the Net Zero Strategy.

Tenant indemnity

The $10 million cap on the Tenant's indemnity has been removed. Commonwealth entities are now encouraged to agree to an appropriate capped amount taking into account Commonwealth policy RMG 414, internal requirements, their risk profile and Comcover limitations.

Landlord dealings

The Landlord dealing regime has been significantly expanded. Landlords will now have an obligation to notify the Tenant prior to undertaking a Landlord Dealing, and where that dealing involves a sale, assignment or other transfer of the Land, Building or Premises, the Landlord and new owner will be required to enter into a deed of covenant on terms acceptable to the Tenant wherein the new owner agrees to be bound by all obligations and liabilities of the Landlord under the Lease and any Prior Agreement.

Commonwealth policy updates

The CNL now contains a new part K which incorporates three new provisions from the Commonwealth ClauseBank:

• The first of these provisions is the Commonwealth Supplier Code of Conduct model provision (new clause 48). It is compulsory for non-corporate Commonwealth entities to include the model Code provision in all new contracts (including leases) on and from 1 July 2024.

• The model Notification of Significant Events clause has been inserted as new clause 49. This clause sets out a regime for the reporting and remediation of significant events, including adverse court findings, legal, regulatory or disciplinary action involving the Landlord or its officers, employees, agents or contractors which may adversely affect compliance with Commonwealth policy, requirements, or otherwise negatively impact the Commonwealth's reputation.

• The final new provision is clause 50, which acknowledges the jurisdiction of the National Anti-Corruption Commission and compels the Landlord to comply with any reasonable request of the Commonwealth tenant in relation to any action required or authorised under the National Anti-Corruption Commission Act 2022 (Cth).

Directory boards

The Tenant's obligation to pay the cost of the Landlord listing the Tenant on the building directory boards has been moved from a stand-alone provision to new clause 12.1.3. All of the remaining CNL clauses from clause 19 onwards have now been renumbered as a result.

Getting access to the updated CNL User Guide

The CNL User Guide has been removed from Finance's website and will no longer be publicly available. What this means is that only Commonwealth entities and their representatives will have access to the policy justifications, drafting explanations and alternative clauses going forward.

Any person who is acting for the Commonwealth in relation to the CNL Suite should request a copy of the CNL User Guide be provided by their client when undertaking any negotiations on the CNL.

For anyone acting for a landlord or non-Commonwealth entity clarification could be sought from the relevant Commonwealth tenant on any unclear policy positions or drafting justifications as and when required given the user guidance is no longer publicly accessible.

New documents – Short Form CNL and Shared Tenancy MOU

Perhaps the biggest change to the CNL Suite is the introduction of two new documents: a Short Form CNL and a new Memorandum of Understanding for shared tenancy arrangements.

The Short Form CNL template is largely similar in form to the original CNL template, but is more streamlined in scope. The user guidance suggests that the Short Form CNL is intended for use in non-complex leasing scenarios. Commonwealth tenant entities are encouraged to continue to utilise the original CNL, however the Short Term CNL may be useful in circumstances where the lease is for a short term (three years or less) and/or the lease relates to premises in a regional or remote area. Any person seeking to use the Short Form CNL template should be aware that amendments may be required to comply with Commonwealth policy (eg. environmental policy and Green Lease Schedules). For further guidance on the use of the Short Form CNL please contact Finance.

The second new document is a new form of MOU (Shared Tenancy MOU), which could be used for the co-location of premises by Commonwealth entities where a sublease is not appropriate. For example, the MOU could be used by one Commonwealth entity to licence equipment and workstations in a shared area from another, or where it is not possible to physically segregate an area of the premises for subletting purposes. The parties should carefully consider all possible shared services, such as cleaning, use of meeting rooms, internet and telecommunications services and security costs and adapt the MOU accordingly.

Because the Shared Tenancy MOU is not publicly available, legal practitioners will need to request a copy from their Commonwealth clients if they think it would be relevant to the leasing transaction at hand.

Green Lease Schedules and Energy Management Plans

The changes to the CNL follow the publication of a new suite of Green Lease Schedules and accompanying Energy Management Plans (GLS Suite) on 2 September 2025. This is the first time the GLS Suite has been updated since its original publication in 2010.

Inclusion of a GLS is mandatory in a Commonwealth lease on and from 1 January 2025 in all leases in which the Commonwealth is a party, which are for a net lettable area of 1000 square metres or greater and are for a term of four or more years.

The key changes in the new GLS are primarily to align the GLS Suite to the Net Zero Strategy, including metering and reporting requirements.

We've prepared a detailed summary of the changes in each of the GLS templates. Please contact us if you are interested in obtaining a copy.

Key takeaways for Commonwealth leasing

Although much of the CNL Suite is unchanged from the 2019 version, users should not make any assumptions given the nature of the changes in the 2025 version and the updated GLS Suite.

For those Commonwealth entities going to market or negotiating property leasing transactions, the changes may affect your financial outcomes, negotiating strategy and final form of the lease.

Accordingly, we recommend that users of the Commonwealth CNL Suite carefully consider their transaction at hand to determine which CNL Suite of documents should be utilised and tailored to optimise their leasing outcomes.