Agreement for lease - commercial property

Everyone is familiar with the concept that when you buy a property you initially enter into a contract to buy it and then complete the purchase at a later stage. Similarly an agreement for lease is used where the terms of a lease have been agreed but completion of the lease will not occur immediately. So instead of a contract followed by a transfer you have an agreement for lease followed by the completion of the lease.

Both the agreement for lease and lease are negotiated at the same time and once both documents are agreed the agreement for lease is exchanged and then the lease is completed in accordance with the terms of the agreement for lease.

However an agreement for lease is not used as frequently as a contract to purchase land as usually once a lease is agreed the parties proceed straight to the completion of it. There are however circumstances where the parties may decide to enter into an agreement for lease, this is often when the completion of the lease is conditional upon outstanding matters. 

If you would like to speak to a specialist commercial property solicitor about an agreement for lease please call us on 01616 966 229.


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Common scenarios for agreements of lease


Either the landlord or the tenant may require a particular planning permission for the use intended by the tenant. The agreement for lease will contain provisions regarding obtaining these and once that has been obtained that then triggers completion of the lease

Building works

The parties may only agree to enter into a lease once certain building works have been carried out, this can range from the construction of the property to minor fitting out works required by the parties. Completion takes place once the works have been completed.


The prospective landlord may not yet own the property that is to be let but wants the security that once it has been bought it will be occupied by the tenant. In this scenario completion of the lease will be triggered by the purchase of the property by the landlord.

Obtaining vacant possession

This is the scenario where the landlord already has a tenant in occupation but that tenancy has yet to come to an end and the landlord has found another prospective tenant willing to take a lease of the property. The landlord, in order to have the security that once they have obtained vacant possession they will not have an empty property may enter into an agreement for lease with the prospective tenant conditional upon the landlord obtaining vacant possession.

This is a general overview of the matters that can be raised when dealing with an agreement for lease, if you would like to speak to a member of our commercial property to discuss your situation please call us on 01616 966 229 and our team would be happy to provide further and more detailed guidance.

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