Key Facts About Commercial Property Leasing
Most SMEs need a physical space to operate from and this need increasing the more an SME grows.
Commercial property leasing at a market rent is a common way for a commercial business to occupy premises and whether you are a Landlord or Tenant, our expert commercial lease lawyers and solicitors can advise throughout the commercial lease transaction, and beyond.
Commercial leasing requires careful consideration because it's often long and complex. There are compelling obligations and responsibilities for tenants, landlords and guarantors, and as such, all parties should ensure that they are safeguarded. Our expert commercial property lawyers
work with both tenants and landlords to provide legal advice on commercial leasing and deal with property disputes and on other types of commercial property law.
What is a Commercial Lease?
A commercial lease is the legally binding contract between a landlord and a business tenant that provides the tenant the right to use a specific property for commercial activity. The commercial lease also details the rights and responsibilities of both the tenant and landlord during a particular time period.
In a standard commercial property lease, you can expect to find the following:
- Address and type of property being let
- Type of business the property is being used for
- Term of the tenancy (fixed term or renewable) and provisions for renewal
- Rent - amount payable, when and how often
- Ownership of leasehold improvements
- Provisions of security or damage deposit
- Any other agreements discussed at the point of negotiation.
In some cases, a commercial lease will also detail subletting opportunities, provisions for insurance and notice periods for termination of tenancy from both the landlord and tenant perspectives.
Commercial Leasing for Landlords
As a Landlord, you need to protect your Commercial Property assets and ensure that, during the term, the premises are well maintained and managed. A commercial property lease also enables you to maintain a sufficient degree of control over the premises.
Landlords also need to be confident that the rent and service charge will be paid and our Commercial Lease lawyers can advise on additional protections, such as guarantees and rent deposits.
Commercial Leasing for Tenants
If you are a Tenant taking on new premises, you are likely to be focussing on the additional opportunities and growth this will. However, it is important to understand that you are also taking on significant liabilities, as well as restrictions, contained in the commercial lease and relating to the premises generally.
It is not just the rent and service charge you need to consider. Whilst you are, in effect, the owner of the premises for the term, you are also constrained by the lease and so are not free to run the premises as you want – so, for example, the commercial lease will dictate when and how you must repair and decorate the premises, when you can open and for what use, when and how you can dispose of the premises and what alterations you can carry out.
As a tenant, you will also be responsible for general issues affecting the property, such as planning obligations and statutory liabilities. It is essential that due diligence is carried out before you commit to a commercial property lease. This is because once you have signed a contract, it cannot be changed without the agreement of the landlord. You must understand what you are taking on and can factor this into your business planning and budgeting. Your commercial lease solicitor will carry this out on your behalf allowing you to negotiate the terms of the l lease as you require, to suit your needs. This allows you to make an informed decision, before signing up to the lease.
Does it suit your business needs to have to vacate the premises at the end of the term? Do you need flexibility to be able to leave during the term? Our commercial lease lawyers are able to advise and help you get the security you need.
Our expert commercial lease lawyers help both tenants and landlords with all the details and lease issues of managing commercial property leases at an affordable price.
Our blog posts can also provide information and advice on commercial leasing including ‘How Commercial Lease Tenants can Protect Themselves from Forfeiture’
, aiming to provide you with legal advice to help you gain a better understanding before speaking to a lawyer.
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