The five benefits of a professionally drafted commercial tenancy agreement

What is a ‘Tenancy at Will’?

An implied commercial tenancy may be a tenancy at will, which runs indefinitely and is terminated immediately following notice from either party, or a periodic tenancy which runs for a certain period (for example, a month), and can be terminated at the end of the period following notice from either party.  In both cases, the landlord is deemed to be granting occupation of a premises in exchange for rent.

Why Bother With a Written Contract?

While a verbal tenancy agreement is a quicker and more flexible, a written tenancy has important benefits:

1. Avoids misinterpretation: It helps to confirm the basis of the occupational relationship between the parties. Evidence can be more easily referred to show an occupant’s rights of occupation where this is questioned and there is less reliance on parties memory or interpretation of the facts where verbal agreements are made.
2. Allocates responsibilities clearly: A written agreement will provide clarity on the terms of the occupational relationship. Important terms include determining: responsibility for insuring or repairing the property, conditions of use, when the tenancy ends or how disputes are dealt with.

Even if you have a written tenancy, it is just as important to get the drafting right.  The benefits of good drafting can include:

3. Better working relationships: Clear and comprehensive tenancy terms mean both parties understand their obligations to each other to help ensure a smooth working relationship and avoid any disputes due to ambiguous terms.
4. Avoidance of unfair terms: More evenly balanced tenancy obligations between the parties to allow both parties to fulfil their functions as effectively and efficiently as possible and help avoid unfair terms which are difficult to adhere to.
5. Receive up to date legal protection: More up-to-date property law provisions so both parties have the benefit of the latest statutory protections. Certain statutory protections, such as forfeiture, may only be available if there are provisions in the agreement allowing for them.

If you’re a tenant and need a lawyer to look over your commercial tenancy agreement or a landlord looking to put formal arrangements in place for your commercial tenant, please don’t hesitate to get in touch with myself or one of my colleagues in our Commercial Property or Property Disputes teams and we will see how we can help.