When leasing commercial property both landlord and tenant have made/are making a substantial investment that needs protecting. A properly drafted lease regulates the occupation of the property, ensuring each party’s obligations are clear, enabling everyone to get on with what they actually want to do.
Who pays for what? The lease governs who is responsible for rent, service charges, insurance premiums, utility costs, business rates and taxes and any other costs relating to the property. A prospective tenant will want to know what the property is likely to cost whilst a landlord will want to ensure that it can recover all costs from the tenant.
What if the tenant doesn’t need the property any longer? Can the tenant transfer the lease or underlet the property? Is there a contractual right for the parties to end the lease early?
Other key provisions include repairing obligations, rent reviews, insurance, service charges and restrictions on the tenant’s ability to alter the property. All these terms may materially affect the commercial viability of the tenant’s business but are important for a landlord.
A landlord wants to be able to control the way the property is used and to prevent a tenant damaging it or its value. The landlord may be limited by its funder’s requirements and restrictions and cannot make concessions to a tenant.
The length of the contractual term and the tenant’s right to remain in the property or to have a new lease when the lease expires are key factors in initial negotiations between landlord and tenant or their respective agents.
Our Real Estate team has extensive experience in acting for landlords and tenants of all sizes. Expert lawyers understand that in most cases the landlord and tenant want to achieve a balanced outcome, and that unnecessary confrontation causes lost time and money.
At Greenwoods we will always take the time at the beginning of a transaction to discuss what’s important to our client and why. We avoid spending time on issues that are of no importance to our client and concentrate on negotiating those issues that are material to it. Our lawyers listen, explain and offer guidance whilst remembering first and foremost that this is a commercial negotiation, and the lease is just the start of the landlord and tenant relationship.
Our Property Disputes team deals with issues such as exercising break options, interim and terminal dilapidations, end of term obligations and responsibilities, providing practical advice and guidance.
It’s always best to get in touch as soon as possible so we can advise you on any legal technicalities, or points you may not have considered, before you agree final heads of terms.
For landlords we can review your title, consider any mortgagee’s requirements, discuss any unusual or special matters relating to the property which must be reflected in the lease and prepare a draft lease and letting pack to save time.
For tenants we can advise you about what you are likely to need to progress as quickly as possible, For example, prepare plans and specifications for alterations you wish to carry out so that you can obtain landlord’s approval.
Talk to us about how we can help with your transaction and support you to get on with running your business.