Landlord and Tenant (Business)

landlord-and-tenant-business-featured-imageLandlord & Tenant Law in this context means the law surrounding the creation, checking and negotiation of commercial leases.


  • Drafting Lease
  • Checking Lease
  • Negotiating Lease

Of Interest

For both parties considerations should include:

Agree a Heads of Terms which is a basic outline which deals with the important points of the agreement.

Ensure that you are clear about the rent, is there:

  • VAT?
  • VAT to reclaim?
  • Rent free period?
  • Heavy Rent Review?

Do you want the option of ending the lease early, through a break clause. Also, if this is agreed is there any early break penalty? Consider Stamp Duty… there is less duty to pay on a short term with right of renewal rather than a longer lease with a break clause.

For the landlord

Has the prospective tenant made it clear they wish to make alterations to the property? Would you allow alterations? Would you wish the property to be returned to it’s original state at the end of the tenancy, and if yes, have you ensured your contract obliges the tenant to do so?

If the tenant is to be a business; it is not uncommon for them to want to sub-let parts of the property. Are you happy for the tenant to then sub-let the property? Would you want clauses included in the contract preventing them from doing so?

For the tenant

Investigate all possible outgoings including:

  • Rent
  • Insurance
  • Service Charges
  • Repair
  • Decoration
  • Business Rates
  • Tax
  • Utilities
  • Business Costs

Beware if a lease obliges you to “keep in good and substantial repair and condition” or “to keep in a tenant able condition”. This could mean that the premises have to be improved upon and may be costly.

Do you need the freedom to sub-let or transfer the whole or any part of the premises? Often a lease will refuse any sublet or transfer of a part of the premises.

Do any alterations have to be made to the premises? If so these should be agreed at the outset and as part of the negotiations for the lease. Also, consideration should be given about the need to restore the premises to the former condition together with the cost of doing so.

Consider any geographic or planning restrictions which could lead to the premises leased being unfair for you business.

A right to renew, if the lease is excluded from the protection of sections 24-28 of the Landlord & Tenant Act 1954, consider the cost of relocating at the end of the lease term.

Check the area of the premises and investigate the local market for rentals through the local authority’s records for business rates. For further information, feel free to contact us