Leasing a commercial property can be essential for many businesses and provide a better financial reason than buying a property especially for start-ups who tend to not have large sums of cash or are not willing to invest in a long-term mortgage until a few years after they have been in business. Furthermore, the owner of the property you want might only want to rent it as it's in a prime location.
Our Commercial Property team has experience in drafting and negotiating commercial property leases on all types of commercial property.
Particular issues to be considered are;
Length of term – this may have implications on the stamp duty payable and registration of the lease at the Land Registry.
Rental – when payable and has consideration being given to a rent-free period?
Break Options – who can exercise these and what if any conditions are to be imposed?
Rent review - what mechanism is advisable, a market rent review or a retail prices index review, what is the frequency of review?
Repair - Lenders or investment landlords often require what is known as a FRI lease or a full repairing or insuring lease. Tenants are best advised to resist this on older buildings, where a more limited repairing obligation is advisable by reference to internal repair only or by limiting the standard of repair to a schedule of condition.
Service charge – the mechanism for determining what is payable and challenging this.
Security of tenure – is the lease to be granted with the benefit of security of tenure - that is a right to renew the lease at the end of the term or is this to be excluded?
Guarantee provisions – is there to be a guarantor? If so are the guarantee provisions to be limited at all?
If you are thinking of leasing a commercial property call our team today for expert advice
We can also help you with any of the following: