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5 Things to Check Before Signing a Commercial Lease

on Thursday, 17 October 2019.

Are you about to take on a commercial lease? This is what you should look out for before you sign.

When landlords and tenants are agreeing the terms of a lease, some matters like rent are typically addressed while other equally important considerations are forgotten.

Here are some of the things you should be looking out for, ideally before you agree terms with the landlord and certainly before you sign your lease.

  • Planning Use
    The lease may specify that the premises are to be used for a certain purpose but it is important to confirm that this is also the authorised use under planning law.

  • Repair
    Your surveyor should assess the state of repair of the property or take photographs to ensure that you are not signing up for more onerous repairing obligations than you need to.

  • Break Clause
    A break clause enables you to terminate the lease before the end of the term. It is useful to agree this where you are entering into a longer lease and you anticipate future changes to your business needs.

The conditions imposed on your ability to validly exercise a break clause are strict, so try to limit these as much as possible.

  • Rent Review
    If there is a rent review clause in the lease, you should ask your surveyor to review any assumptions and disregards. For example, you may want any improvements you have made to the property to be disregarded on rent review, as this would normally increase the value of the property and hence the rent.

  • Stamp Duty Land Tax
    You may have to pay Stamp Duty Land Tax when you enter into a lease. The amount payable will depend on the rent/premium and the length of the lease.

If you have any queries surrounding commercial leases, please contact Madeleine Wakeley in our Commercial Property team on 01923 919 315, or complete the form below.


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