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Entering into a commercial lease can prove a costly mistake if you do not obtain the correct legal advice at early stages, even before Heads of Terms are agreed.

Edwards & Co specialise in advising SMEs on all matters related the highly risky area of leasing let/letting commercial property.

Proposed tenants need to ensure that they are aware of the following matters before they commit themselves:

1. Term of Lease. It is important to align the term of Lease with your business plan and how you intend to grow. Also, if you have any funding limits in relation to timing, it may be wise to seek a break clause to allow the business to leave after a trial period.
2. Rent. Is the rent affordable and what are the procedures for the rent review? Is the rent review upwards only and correct for the area?
3. User. Can you carry out your intended business at the premises? You need to ensure that the allowed planning uses match with your business description or else the onus could be upon you to make the Application for Change of Use. This can be costly and there is no guarantee that same can be allowed or approved.
4. Repairs. You need to be aware of who is responsible for internal/external repairs and whether the business should conduct a Condition Survey prior to completion and have same addended to the Lease to ensure that there is a touchstone as to the standard of how you would require to return the premises into.
5. Assignment/sub-letting. If you are unable to negotiate a Break Clause enabling you to terminate, you will be wise to ensure that there are no restrictions on the assignment or sub-letting of the premises or else you could be left with the responsibility and obligations for the Lease for the entirety of the term. Also there may be issues regarding guarantee or security provisions in relation to either you taking the Lease and/or the assignment of same to new tenant. The break clause may also stipulate that the premises must be in good repair before you assign.
6. Fire regulations/health and safety regulations. You will need to ensure that the property complies with these regulations and who is responsible for such management in the building. You could end up being responsible for any injuries sustained by your employee or customers if the Lease is not adequately drafted.

If you have any queries regarding review of any lease, heads of terms, termination of a business tenancy or any landlord or tenant issues, please do not hesitate to contact David Sturgess.



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