Are you planning to lease commercial premises?
What type of Property?
Instructing a solicitor
- Planning - Is there planning permission for the use of the premises and does it match your planned use for the premises? Are there any restrictions included in that planning permission which may affect your business?
- Rights of way and easements - For example, the general public or a neighbour may have rights to use the premises you are leasing or the right to use a communal accessway, or there may be certain restrictions on the use of the premises stemming from a previous land transaction.
- Boundaries - You should be aware of who is responsible for maintaining boundaries, hedges and walls. Responsibility for this should also be set out in your lease.
- Local area information - For example, is there a new parking scheme or road works which may restrict access to the business, and will you be expected to pay business rates?
- Environmental liabilities - You may think that the landlord will be liable for any environmental issues but that is not always the case and as such, you need to be aware of any potential problems such as land contamination, which can be extremely costly to remediate. This also covers problems such as being in an area of flood risk or more topically, the premises being near a rail development such as HS2 or Crossrail.
- Utilities - You need to make sure that the property is supplied with water, drainage, electricity and gas. Depending on your business you may also need to check if you require consent to discharge trade effluent; is there a charge which may come back on you as the tenant for any of the utilities?
- How much rent is payable, when and how it is due, and what other payments will be due? For example, insurance, rent and service charge rent. Is there a rent deposit to pay?
- How is the lease terminated and are you able to activate a break clause if necessary?
- To what extent are you liable to maintain and repair the property and what is the landlord responsible for?
- Any specific rights you require that are particular to your business, like tables outside the premises for a cafe or additional networking space for an office.
- Are you responsible for paying service charge rent, which is usually a fair percentage of the amount the landlord has to spend on the buildings upkeep, for example, lifts, gardens, staircases, lighting etc?
- Will you be able to sublet the premises or assign the lease if you are struggling to pay the rent, and what are the landlord’s restrictions on doing so?
- Most commercial leases include a rental review every 5 years, so this clause should be drafted fairly to ensure neither party is unfairly disadvantaged.
- Are you able to make alterations to the premises and do you need to obtain landlord consent for those? Are you expected to return the premises to its original state once the lease is ended?
- Does the landlord require you or another party to act as a guarantor for the business? If so this will need to be carefully documented.
- Who is responsible for insuring the premises and its contents, and what happens in the event of the property becoming unfit for purpose after a fire or flood?
- Most commercial leases require the tenant to waive their right to security of tenure under the 1954 Landlord and Tenant Act and you will be required to sign a declaration agreeing to this.
Registering the lease
Stamp Duty Land Transaction Tax
How can LawBite help?
Read more of our latest blog posts, featuring all the latest legal news, analysis and opinion from our expert lawyers.
- By Lawbite Team
- November 09, 2020
When an SME takes out a commercial property lease that it will want to carry out works on the premises, likely both at the outset and at other time...
- By Lawbite Team
- May 21, 2020
Many commercial landlords and tenants are struggling during the COVID-19 outbreak. There are pressures from both sides, forcing the compliance of l...
- By Lawbite Team
- May 05, 2020
At LawBite we are seeing an increasing number of queries and concerns following the spread of COVID-19 and how it impacts the rental sector. We hav...
LawBite can help you
LawBite is on a mission to provide business legal advice that is easier to access, clearer to understand and much cheaper. Our on-line legal advice platform can quickly connect you with expert business legal advice. Our friendly, highly qualified business lawyers, solicitors and mediators will give you the guidance and reassurance that comes from customised legal advice for small and medium sized business.
Whether you are bringing or defending a legal claim, outsourcing work, want a business contract review to ward off disagreements, talk to an expert trademark lawyer, resolve a contractual dispute with methods like mediation and arbitration, or getting your new company set up and on the right footing with a robust shareholder agreement and GDPR standards, we can help you succeed.