Leases Part 2 - The Premises, Rights Granted and Reserved and Use

Extent of the Premises

The extent of the premises needs to be clearly defined in the lease. If the lease is of office premises within a building, a high street retail unit or within a shopping centre it will generally be an internal only demise and the various parts of the building which are included within the demise should be set out in detail.

Failure to do so could lead to disputes in the future as to who has the responsibility for repairs to the premises and the building and the service media serving the premises and/or building.

If the lease being granted is for a term 'in excess' of seven years it will be compulsorily registrable at the Land Registry and therefore a Land Registry compliant plan will also be required. The Land Registry has issued general guidance on lease plans, but this is not an exhaustive list and the requirements will depend on the nature of the premises.

Rights

The parties should consider carefully exactly what rights are required for the tenant to occupy the premises and they should be expressly documented in the lease. Such rights to be considered could include:

• access rights, both over any internal parts of the building and external parts
• a right to enter the landlord’s adjoining property for purposes of repair or otherwise to comply with lease covenants
• a right of support and protection
• a right to use emergency fire escapes
• a right to install plant and equipment including air conditioning plant at the building
• car parking rights
• service media rights
• signage rights

A landlord will also want to reserve rights over a property, which means that even though the lease is granting the tenant exclusive occupation they have rights to enter the property for various reasons. These could conclude:

• a right of support and protection
• service media rights
• rights to develop the remainder of the landlord’s property
• a right to erect scaffolding at the building
• a right to enter onto the premises to inspect its repair and condition

Given that interruption in a tenant’s business can cause substantial losses a tenant's solicitor will want to ensure that there are restrictions on the landlord’s right of access to the premises. This may include not accessing at certain times/dates such as during a Christmas trading period for a retail client, only accessing on written notice, where reasonably necessary and for a reasonable time, making good any damage caused, maintaining access to the premises at all times and not obscuring the shop front or fascia of the Property (if there is one).

Use

The use of the property under a lease will be limited to a permitted use, which should correspond to the use which is permitted by planning law. A tenant should however be aware that the fact that a lease permits a particular use does not mean that it is permitted under planning and this should be checked by a tenant's solicitor as part of the due diligence process. A tenant will generally have an obligation to comply with all laws in respect of the property and therefore if it uses the property for a use which is not permitted by planning law this could be a breach.

One consideration in respect of new leases are the recent changes to the Use Classes Order and any references to a particular use under the Town and Country Planning (Use Classes) Order 1987 should ensure that it refers to the updated use especially in renewal leases where terms and definitions are carried over from old leases.

If you would like to discuss any of these issues, please contact Steven Faragher in our Commercial Property team on 0207 665 0906, or complete the form below.