Commercial Property Leases

The Basic Components of a Commercial Lease

Most commercial lease documents will contain the following:

• The names of the landlord and tenant (or lessor and lessee)
• Details of the premises to be leased
• The duration of the lease
• How much rent is to be paid
• Tenants Covenants
• Landlord Covenants
• Rights and reservations

Protecting Your Interests – The Landlord

To protect your property and financial security ensure that the agreement between yourself and the tenant contains adequate provisions for:

• Rent reviews
• Repairs and alterations to the property
• A licence to assign or sublet of the premises if you are happy for the tenant to do this
• Insurance
• A detailed list of what the property can and cannot be used for
• Disputes resolution procedures

Protecting Your Interests – The Tenant

When leasing commercial premises a tenant needs to take extra care to ensure that their interests are protected upfront as the property they are leasing is also providing their livelihood. Things to include in the contract are:

• Full disclosure of what parts of the premises and land are your responsibility when it comes to maintenance and repairs
• Whether the landlord has provided adequate insurance
• The procedure in which rent reviews will be conducted
• Is there a break clause included in the terms
• Renewal terms
• Procedures for management of any disputes

Important Tip Before signing any agreement make sure you undertake due diligence with regards to the condition of the property. Make sure you engage a surveyor and draw up a Schedule of Condition and both you and the landlord are in complete agreement regarding the original state of the property.

Do I Need Legal Advice?

Commercial leases are far more complex than residential leases and governed by the Landlord & Tenant Act 1954. It is therefore essential that you obtain legal advice, whether you are a landlord or a tenant. At Bennet Oakley Solicitors we have nearly six decades of experience in negotiating, drafting, and renewing commercial leases and resolving any disputes which may arise from them.