The main Terms of the Lease must be agreed between the Parties to enable an appropriate lease to be drawn up. It must be decided by the parties whether a Rent Deposit will be paid (usually one to three months rent by way of deposit) to be held by the Person giving the Lease and returnable at the conclusion of the Lease provided that the terms and conditions of the Lease have been abided by. If the granting of a Lease also includes the sale of a business at the property to be leased then the provisions contained in Buying/Selling Commercial Properties will also apply.
It is usual for the Landlord to require that the Tenant be responsible for his Solicitors Fees (his Solicitors costs and disbursements for preparing the lease and other incidental responsibilities). The Landlord will often require Bank and Trade References (a letter from your bank giving their opinion as to whether you are in a financially suitable position to take on the lease and references from Suppliers that you have previously dealt with, advising as to your reliability).
On instructing a solicitor in relation to the preparation of a Lease it is usual for the parties to the lease to have agreed the term of the lease (how long the lease will last), the commencement rent (the initial amount of rent to be paid) and how the rent is to be paid (i.e. By way of standing order or direct debit), the rent review dates (at what stages in the lease the rent will be reviewed, i.e. every 3 or 5 years), whether there will be an option to renew (i.e. whether at the end of the Lease there will be a right for the Tenant to enter into a new lease on the property), an Option to Buy (should the Landlord decide to sell the property and usually at full market value) and whether there will be a Break Clause, giving (usually the Tenant but on occasion the Landlord) the opportunity to give up the lease after a certain period of time (a given number of years and usually requiring between one and three months notice of intention).
All Leases in excess of 7 years must be registered at HM Land Registry. Please see Buying a Property for details of Registration and the completion of an SDLT form. If you are buying, selling or leasing a commercial property and/or business please contact us in order that we may advise you specifically in relation to your needs and requirements.
Leon Kaye Solicitors are fully accredited members of The Law Society’s Quality Conveyancing Scheme. For advice on commercial property please email: firstname.lastname@example.org or telephone: Chelsea Office: 020 7228 2020 or Knightsbridge Office: 020 7095 0930