Commercial Conveyancing Solicitors and Commercial Leases

Commercial Conveyancing Solicitors and Commercial Leases

More often than not, Commercial Conveyancing can be broadly split into two categories –

  • The sale of a commercial premise with designated planning criteria (for instance a vacant or occupied property) in its entirety, with any tenants/tenancy agreements etc intact to a new owner.
  • Commercial Leases negotiated between the owner of a commercial premise (the Landlord) and the Prospective Occupier (the Tenant).
    The purpose of this article is to act as a very basic guidance note for potential Tenants looking to take up a new Commercial Lease, some of the key points you need to look out for and why it is important to seek professional advice from a Commercial Conveyancing Solicitor. If you are looking to sell or buy the freehold interest of a commercial property, please click here.

Though the contents of a Commercial Lease vary widely between properties in question depending on your proposed use class and/or other factors, this document will almost always cover the following key points –

  • Length of the Lease (generally known as the Term)
  • Service Charge
  • Alterations
  • Repairing and Decoration formalities
  • Other benefits and covenants

In case of a brand new Commercial Lease being granted, the terms can usually be negotiated. This more importantly is very much a key part of the Conveyancing Process that must be reviewed diligently by an experienced Commercial Conveyancing Solicitor. As outlined above, and given it is not uncommon for the Term of most leases to last for a minimum of 5 years +, great caution must be taken before entering into these leases as the onus of the lease (restrictions that would otherwise hinder the Tenant from enjoying the property) falls on the tenant.

If you are acquiring an existing lease however, for instance; you are purchasing the Freehold of a commercial property with a Tenant/Lease already in place; any existing terms are not open to negotiation (if they are – a Deed of Variation will be required which falls beyond the merits of this article). This does not automatically exempt your requirement to having the Lease reviewed carefully as a defective lease will naturally affect both the value and the marketability of the property.

What does negotiating a Commercial Lease in Commercial Conveyancing entail?

Assuming we are considering a commercial conveyancing transaction in the context of a Grant of New Commercial Lease, the terms of the lease are almost always up for negotiation – even if your offer has been based on unconditional terms. Your Commercial Property Solicitor will carefully read the draft version of the lease once received from your Landlords’ S review all provisions, plans etc supplied and report to you with their findings. Your Solicitor will also request relevant amendments or additions where required from the Landlords’ Solicitor.

Since Commercial Leases are an unregulated arm of Conveyancing (largely in England and Wales), your Commercial Property Solicitor will often follow guidelines as stipulated in the Code for Leasing Businesses. It is also worth noting that rent payable on most commercial leases widely use an ‘upward only’ review mechanism. What this in effect means is that the rent the tenant will eventually pay at and beyond a ‘rent review date’ cannot be less than what the tenant is currently paying – even if the markets have fallen. A good commercial property solicitor acting for the tenant could potentially look to negotiating rent reviews in line with more industry acceptable indices such as RPI.

There are various other important aspects of the commercial lease negotiation process which cannot simply be explained on a blanket – fit for all article such as this. These include but are not limited to break clauses, repairing provisions, length of tenant responsibility, dilapidation clauses and provisions etc.

Please contact our expert team of Commercial Lease and Commercial Conveyancing Solicitors for advice and to find out how we may assist with your transaction on 0203 375 2187 or by clicking here.



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