The Commercial Property team at Adams Solicitors has expertise and experience acting for both landlord and tenants in all aspects of commercial property leases. This is an area where it is always worth taking knowledgeable legal advice – leases for commercial property are often relatively complex and it is important that you fully understand the implications and obligations, in order to avoid costly mistakes.
Some of the key areas to consider when drafting a lease are described below. For further information and advice on how Adams can assist with your commercial property lease, including renewals and forfeiture of lease, please contact our specialist team of solicitors. Either complete our enquiry form, or call us on 020 7790 2000.
Length of Term
In recent years there has been a growing tendency for Tenants to seek shorter terms. There are a number of pros and cons for both the parties to a commercial lease in this respect and it is worthwhile seeking advice to help establish the approach most suitable for your business and position.
Rent, rent reviews and break clauses
It is important to seek professional advice to establish the fair rent for the premises. You should also consider whether your lease should contain an ‘option to determine’, or in other words, whether the Landlord and Tenant should be entitled to break the Lease at some point during the term.
Obligation to Repair
It is important that the Tenant fully understands the extent of his obligation to repair, whether this is an internal repairing liability, a full repairing liability and/or a liability to refund a proportion of the costs incurred by the Landlord in repairing a building of which the premises form a part.
Assignment or Sub-letting
When agreeing the terms for a commercial lease, the Landlord and Tenant should consider the arrangements for assignment or sub-letting.
Alterations
Most Landlords will wish to keep total control over the structure of the building and carefully drafted Lease should reflect this. However, a Tenant should consider whether he might need to make structural alterations and may wish to include this provision in the Lease. Adams is experienced at negotiating from both perspectives and can advise you accordingly.
Improvements
A Lease should state how a Tenant’s improvements are to be reflected when the rent is reviewed, particularly where the tenant has carried out extensive re-fitting works.
The Authorised use of the Premises
The Landlord should usually ensure that the "User" provisions in a Lease prevent a Tenant from changing its use to one which attracts a lower rental value than the use the Landlord intends. Equally, most Tenants will wish to make sure that the user provisions in the Lease allow him as much flexibility as is reasonable, so that if he has to assign the Lease, he is not unduly limited when the premises are marketed as to the type of business which the User provisions in the Lease allow to be carried on.
Formal Notices
It is important that the Commercial Landlord or Tenant has a full understanding of the need for and the effect of the formal Notices required in connection with Leases. These Notices cover the termination and renewal of Leases, the operation of Break Clauses, the operation of Rent Review provisions in Leases, and Repair and Dilapidation Notices in particular. Failure to serve or deal with Notices within the relevant time limits can result in severe consequences.
Forfeiture of Lease
Where necessary, Adams will assist with the repossession of a commercial property, including terminating the lease and handing control back to the Landlord. We will advise you on correct procedure and ensure that the lease is forfeited through peaceful entry of the premises, changing the locks and correct display of the notices of forfeiture. .
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