A commercial property lease is a legally binding contract made between a landlord and a business tenant. The lease gives the business enterprise the right to use the property for certain specified commercial activity at an agreed rate for a set period of time.
Commercial property leases tend to be more complicated than residential leases. Property leases for businesses must be carefully considered and clearly drafted to ensure both landlord and tenant know their respective obligations.
The terms and conditions of the lease must be read and observed to ensure they meet the needs of a business. Any errors or discrepancies that are uncovered later on could cause significant stress.
In this blog, our experienced Commercial Lease Solicitors answer some frequently asked questions about commercial property leases.
What is a commercial property lease?
A commercial lease is a legal contract made between a landlord (the ‘lessor’) and their tenant (the ‘lessee’) regarding a property or premises that will be used for commercial purposes.
The lease sets out all the landlord’s and tenant’s rights and responsibilities, including information about permitted activities, certain obligations and rent.
What is included in a commercial property lease?
A standard commercial property lease can typically include information about:
• The type of property being let.
• The address of the building.
• The length of the tenancy.
• The type of tenancy (for example, whether it is a fixed term or a term that can be renewed periodically).
• The amount of rent charged.
• When and how the rent will be paid.
• The types of business that can be carried out in the property.
• Details of the security deposit.
• Any improvements the landlord is responsible for.
• What improvements the tenant is responsible for.
• Whether the tenant is allowed to sublet the property.
• Notice provisions for termination of the tenancy.
What are some common pitfalls for tenants negotiating a commercial property lease?
There are many potential pitfalls of a commercial property lease. Some common sticking points that tenants should be particularly aware of include clauses relating to:
• Building repairs and maintenance. Some leases include terms stating that a tenant is responsible for the whole cost of any repairs that need to be carried out on a building during a tenancy.
• Assignment and sub-letting. Sub-letting involves a tenant leasing out all or part of their premises to a third party, whereas an assignment is the transfer of the lease from one party to another. Clauses of a lease relating to these areas must be checked carefully to ensure they meet tenants’ requirements.
• Damage clauses. These usually state that only a landlord can terminate a lease if the rented premises are damaged.
• Operating expenses. In addition to service charges and shouldering the costs for certain ongoing maintenance of a property, some landlords attempt to pass on to their tenants additional fees and costs, including structural repairs, management salaries and depreciation of equipment owned by the landlord. Any additional fees that are likely to be included should be negotiated by the landlord and tenant before the lease is signed.
Do you need a solicitor for a commercial property lease?
It is highly recommended to seek legal advice from an experienced commercial property solicitor if you are considering entering into a commercial property lease.
Commercial leases can be complex. A solicitor will ensure any lease is comprehensive and sufficiently protects your interests.
Should any issues arise during a commercial lease term, a solicitor will also be able to advise on the options available to resolve any disagreements.
The commercial lease solicitors at Bookers & Bolton provide business owners and landlords with a high quality, fast and efficient service. We will always attempt to ensure that there is adequate flexibility in your commercial lease, and it provides the certainty you need.
To speak to one of our commercial property lease specialists, please call us on 01420 558335 or click here to make a free online enquiry, and we will be in touch.
What are commercial property searches?
Similar to the searches that are undertaken by a conveyancer when clients are buying a residential property, solicitors also make a series of enquiries to find out more information about a particular property for tenants considering entering a commercial property lease.
Standard searches completed for commercial property transactions include:
• Local authority search.
• Drainage and water search.
• Environmental and flood risk search.
• Highways search.
Additional searches are available depending on the type of transaction, the area that the property is in, or if a prospective tenant is concerned about something specific about a property.
Searches are all tailored to each transaction. Your solicitor will be able to help you ascertain which you require.
Commercial Lease Solicitors Hampshire
Our experienced Commercial Lease solicitors based in Alton, Hampshire, advise clients on all aspects of commercial property leases.
Our Commercial Lease legal service includes advice on:
• Negotiating the lease agreement.
• Assigning or transferring a lease.
• Subletting.
• Lease renewal.
• Lease surrender.
• Commercial lease disputes, including breach of covenants, commercial lease forfeiture, rent arrears and possession claims.
Our Commercial Lease legal specialists at Bookers & Bolton will ensure that you are provided with the highest quality, fast and efficient service. We will always attempt to ensure that you have flexibility in your commercial lease and achieve the certainty you need.
For legal advice from experienced Commercial Property solicitors, please contact us on 01420 558335 or complete a free online enquiry, and we will be in touch.
