Do you need a Solicitor for a Commercial Lease?

Solicitor guidance for a comercial lease, it’s not essential to get legal advice when buying or leasing a commercial property but it is highly recommended, especially given the high financial value and long periods of commitment that are involved with commercial property transactions.
When buying or leasing the right commercial property, you need to be sure you’ve run all the necessary checks and surveys and investigated title to the property as well as checking the physical condition of the property and its surrounding land.

You’ll also need to decide what’s best for you in terms of buying the freehold, or only obtaining a lease. A solicitor together with your accountant/tax adviser can help you analyse your business plans and determine which is more suited to your long-term needs.

Below we have listed some issues that your solicitor could advise you on when negotiating a commercial lease:

Repair obligations

In a commercial lease it is standard for a Tenant to covenant to keep the premises “in repair”.

A covenant to keep the property in repair includes an obligation to put the property into repair even if the property was not in disrepair at the start of the lease. Therefore, your solicitor can help to water down this obligation and negotiate a reference to a schedule of condition so that you do not have to keep the premises in any better state of condition or repair than they were in at the start of the lease.

Break conditions

From a Tenant’s point of view it is extremely useful to include a break clause in the lease as it will allow some flexibility to bring the lease to an end at any time on a few months’ notice or on a fixed date during the lease term, provided a notice is given. However, the Landlord will usually insert conditions that the Tenant must comply with in order to exercise the break option. Your solicitor will be able to advise you on whether those conditions are too onerous and ensure that the Landlord’s break conditions are reasonable.


Solicitor guidance for a comercial lease, Security of Tenure

A Tenant who has occupied the premises for business purposes has a statutory right to a new lease at the end of the contractual term. However, there are number of instances when this law does not apply for example if the Landlord wants the property back for development purposes or if the tenant has agreed to exclude security of tenure.

If the Tenant has agreed to exclude the security of tenure, then the Tenant will have no right to stay in the premises when the lease ends. Therefore, it is important to instruct a solicitor as they will be able to advise you on the implications of this.

To conclude we would say it is extremely important to instruct a solicitor to draft and negotiate a commercial lease whether you are a landlord or a tenant. We have only highlighted some of the issues above but there is a lot that could go wrong in a commercial lease if you do not know or understand the full implications of what you are agreeing.

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