Commercial leases are complex agreements that can expose both landlords and tenants to extensive liability. It is crucial to ensure that a commercial lease has been negotiated to be in your best interests before you sign it.
At BakerLaw, our commercial property team can advise you in respect of all aspects of commercial leases and make sure you are aware of the implications of signing. We have experience across a full range of sectors and deal with commercial leases for retail units, warehouses, offices and hospitality premises.
We will make sure that your lease properly reflects your needs and that the clauses are tailored to protect your interests as far as possible.
Services offered by our commercial lease solicitors include:
- Negotiating a commercial lease agreement
- Drafting a lease on commercial property
- Lease assignment and subletting
- Licence to occupy
- Commercial rent review
- Lease renewal
- Service charge issues
- Lease variations
- Dealing with dilapidations
- Dealing with a commercial lease dispute
- Eviction under a commercial lease
If you would like to discuss your commercial lease requirements with one of our commercial property experts, ring us on 01252 733 770, contact your local BakerLaw office or email us at firstname.lastname@example.org.
For more information about our services, see Commercial Property.
Our expertise with commercial leases
Commercial lease agreements
Our team have a strong business grounding as well as extensive commercial property expertise. We will take the time to understand the needs of you and your organisation and ensure that we negotiate the right lease terms on your behalf.
We also deal with issues that may arise throughout the tenancy period, offering advice and guidance to help you avoid difficulties and disputes. If a disagreement does arise, we have the experience to enter into negotiations to try and resolve matters quickly and efficiently, without the need for court intervention.
Renewing a commercial lease
A tenant may have an automatic right to renew a lease or this could be excluded in the lease. If you do want to renew a lease, you will need to negotiate the terms with the other party. We can do this on your behalf, ensuring that the new lease is in your best interests.
Commercial lease disputes
In the event of a dispute, we can step in to try and resolve matters without delay. We know that a disagreement over commercial premises can be expensive as well as damaging to your business. Our team will identify the key issues and work on your behalf to reach an agreement quickly and efficiently, avoiding the need for litigation wherever possible.
Commercial leases explained
What should be included in a commercial lease?
The term of the lease – you should ensure that this is right for your needs as you will not easily be able to end a commercial lease.
A break clause – this allows you to end the lease partway through. A tenant may need to pay more to have a break clause included in the lease.
Property usage – if you will be leasing commercial premises, you should ensure that you will be permitted to use them in the way that you wish, both in the short-term and later on, for example, if you expand your business or add in a new service.
Assignment and subletting – whether the tenant will be allowed to assign the lease or sublet the premises during the term of the lease and if so, how this will be dealt with.
Full repairing lease – if the tenant is required to keep the property in good repair and condition, the lease should protect them from being asked to put the property into a better state than it was when the lease commenced. This is done by attaching a schedule of condition to the lease, which will be prepared by a commercial property surveyor.
Rent review – the way in which a rent review will be dealt with, to include when the rent will be reviewed and on what basis it can be increased. This could be a fixed increase or an adjustment in line with the Retail Price Index.
Service charges – it will be preferable for the tenant to negotiate a cap on service charges if possible. This will prevent them be liable for an unlimited sum, for example, if a new roof were to be required.
How do commercial lease renewals work?
Some commercial leases give the tenant an automatic right to renew under the Landlord and Tenant Act 1954. There is a set process to go through in order to ensure that this right is not lost, including serving notice on the landlord within a set period of time.
Once notice has been served, landlord and tenant will generally enter into negotiations to agree on the terms of the new lease. These will not generally be very different from the terms of the original lease.
If the lease is not protected by the Act, then the landlord does not have to consent to a renewal. If both parties want to renew the lease, then new terms can be agreed and, if you choose, they can be substantially different from the previous terms.
How can you end a commercial lease early?
If you wish to end your commercial lease, you will need to look at the terms of your lease agreement to see whether this is possible. If there is a break clause, you can invoke this, taking care to follow the stipulated procedure, to include serving notice correctly.
If there is no break clause, the lease may allow you to assign it to someone else or to sublet the premises to a new tenant. In both cases, the lease will set out the procedure to be followed and it is important that this is done. For example, the landlord will generally want to approve the new tenant and the old tenant may need to sign a guarantee and remain liable for rent and any breaches of the terms of the lease.
What is the difference between a commercial tenancy and a licence to occupy?
While a lease is a contractual agreement allowing the tenant exclusive possession of the property for a fixed term, a licence is simply permission for the tenant to occupy the property without the right to exclusive possession. A licence does not confer a legal interest on the tenant and it cannot be assigned to anyone else.
A licence can be a useful way of allowing a tenant access to the property while a full lease is negotiated. It also offers landlords and tenants a way to let or occupy a property for a shorter period of time and the right to terminate the agreement with short notice.
Can a commercial tenant make changes to the property?
The lease will state whether or not a tenant can make alterations to a commercial property. Where this is permitted, the landlord’s consent will generally need to be obtained first. If the lease permits alterations, the landlord’s consent should not be unreasonably withheld.
Our commercial lease advice fees
We know that your budget is important when dealing with commercial property and we always make sure our costs clear from the start. We provide excellent advice and representation at a fair price and wherever possible we act on a fixed fee basis so that you will know exactly how much you will be charged.
For other issues, we will charge you on an hourly rate, agreeing the work with you in advance so that you know exactly how much it will cost.
For more information, please give us a call on 01252 733 770.
Contact our commercial lease lawyers
If you will be entering into a commercial lease or you have already signed and you need advice on related issues, our experts will be happy to help.