COMMERCIAL LEASE - QUESTIONS TO CONSIDER
These are just a very small number of questions that need to considered when granting or taking a lease
Commencement Date
Q: When will the lease start and is the start date conditional? For example, are repairs required to the property first?
Term
Q: How many years is the lease to run for and will there be a right to extend at the end of the term?
Q: Will lease be within the Landlord & Tenant Act 1954?
Break clauses
Q: Is a break required by either or both parties and if so, what prior period of notice is necessary?
Assignment, Subletting, Mortgaging
Q: What restrictions are to be imposed on a proposed assignment, underletting or mortgage of the property? Must the new tenant have at least equal financial standing? Will the outgoing tenant have to guarantee the new tenant’s rent payments?
Rent
Q: How much rent is payable and is it subject to VAT?
Rent Deposit
Q: Is a rent deposit required and if so, how much?
Rent review
Q: Will there be a rent review clause and if so, when will the rent be reviewed and how. For example, market value?
Business rates
Q: How much are the business rates?
Service charges
Q: Will services be provided and if so, what is the tenant’s share of the costs?
Use
Restrictions
Q: Most leases restrict how a property can be used. Prior consent for change of use may be required. This would normally be the responsibility of the tenant.
Repairs
Q: Who will have the responsibility of repairing, maintaining and decorating the property and what will that include? For Example, the structure, interior and exterior of the property.
Alterations
Q: Will the tenant be allowed to make any alterations and if so, what conditions will the landlord impose?
Insurance
Q: Who will insure the property? Normally the tenant will be responsible for the insurance premium or, if a lease of part, a fair proportion thereof.
Miscellaneous
Breach of Lease Conditions
Q: What happens if the lease conditions are breached by the tenant? What if the Landlord breaches his conditions?