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Rosie Houghton LLB


Solicitor

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Clifford Goldhill


Lawyer

Email Clifford

A business lease is a commercial agreement between a landlord and a tenant, that gives the tenant the right to use a property for a business purpose, over a specified period of time, for a defined sum of money. The legally binding contract contains clauses and provisions defining rights and obligations of the tenant and landlord. These can sometimes be biased in favour of the landlord and therefore need to be carefully scrutinised by a specialist solicitor.


Heads of Terms


The ‘Heads of Terms’ is a document initially produced to specify the basis of the agreement. This will include details of the landlord, the tenant, the property, the lease and the price. Once this has been accepted and approved by both parties the process can move on to the next stage.


The Contract ✍


The “Contract’ is the legal document that defines the particulars of the agreement, details of which include:


  1. Type of Lease (i.e. new, extension, re-assignment)

  2. Length of Term (e.g. 5 years)

  3. Rent Amount (e.g. £4,000 paid quarterly in advance)

  4. Rent Deposits (monies held as security)

  5. Length of Notice to Quit (time needed for termination notification)

  6. Rent Reviews (how frequently rent increases can be considered)

  7. Within the Landlord and Tenant Act 1954 (if omitted, there is no right to renew at the end of the term)

  8. Break clause (allows either party to end the lease before the term has completed)

  9. Service Charges (extra costs required to cover items such as maintenance or running costs)

  10. License for Alterations (what particular changes can be made to the property)

  11. License for Assignment or Sub-Letting (whether the building can be sub-let or assigned to another party)

  12. Repairing Liability (what state of repair the property has to be kept in)

  13. Forfeiture (a clause whereby the landlord may end the tenancy)

  14. Personal Guarantees (landlords sometimes require extra security)

The Transfer


The ‘Transfer’ is required to certify the registration. This involves the completion of the relevant deed document (e.g. a TR1 or TP1 determined by whether the transaction concerns whole or part of the property). An OS1 search is required to determine any third party interests, and an SDLT1 needs to be sent to HRMC to pay the stamp duty. Once this has been effected, an AP1 form can be sent to the land registry.


We are able to draft a new business lease or review an existing one, for a fixed fee, starting from £250.