Drafting & negotiating leases

What to include in a commercial lease

A draft lease can sometimes seem a lengthy and impenetrable document, there are a number of substantive points that will need to be addressed, if they have not already been settled in the heads of terms:

• What repairing obligation is to be imposed? A landlord will want a full repairing, as this will require the tenant to put the property into repair, even if it is currently out of repair. The tenant may want the obligation to hand the property back to the landlord at the end of the term in no better but no worse a condition as existed at the date of the lease. This is commonly evidenced by a photographic schedule of condition

• What is the permitted use set out in the lease and how can it be varied?

• How often is the rent to be reviewed and if so on what basis? Is the rent review to be on an open market basis or linked to inflation?

• If there is a break clause, what conditions are too be attached to the exercise of the break clause?

• Is there to be a rent deposit?

• If the tenant is to carry out works, how are they to be documented is there to be a licence for alterations?

• If the letting is of part of a building it is usual for the landlord to recover a proportion of its maintenance costs from the tenant, the landlord will require full recovery whereas the tenant may want it capped

These are just a number of points to consider and can vary from client to client. Our experienced lease drafting solicitors will aim to make the transaction proceed as smoothly as possible.

This is a general overview of the matters that can be raised when dealing with the drafting and negotiation of a 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.