Why It’s Crucial to Get Legal Advice Before Taking a Commercial Lease
In a rising market where good commercial property is becoming harder to come by on favourable terms, there can be a temptation to rush through lease agreements to avoid losing out or facing rent increases. However, many tenants later seek advice only after committing to leases without fully understanding the wider implications. When business circumstances change or downturns occur, tenants often find themselves contractually bound with little recourse.
A commercial property lease is often one of the most significant transactions you will undertake in your lifetime. It is therefore essential to be fully advised before committing.
Key Considerations When Taking a Commercial Lease
- Who is taking the lease? — If the lease is in the name of a company, does the landlord require additional security such as a rent deposit deed or a personal guarantee from a director? Do the directors understand the extent of their personal liability?
- Repairing obligations — Is the lease fully insuring and repairing? Are you aware of the risks if the property requires repairs and your obligations are not limited, for example, by a schedule of condition?
- Break clauses — If you have the option to break the lease early, are the conditions practical and achievable? Can you recover any overpaid rent?
- Security of tenure — Has the lease been excluded from the protections under Sections 24-28 of the Landlord and Tenant Act 1954, which allow tenants to request a new lease? Is this important for your business continuity?
- Stamp Duty Land Tax (SDLT) — How much is payable, and can you comply with HMRC’s 30-day filing requirement to avoid fines?
- Land Registry requirements — Is the lease registerable? Are the attached plans compliant with Land Registry standards?
How Franklins Solicitors Can Help
Franklins Solicitors LLP have an experienced team ready to guide you through negotiating and completing new leases. For any queries about commercial leases or other property transactions, please contact Jo Pusey and her team on 01604 828282 or 01908 660966, or email [email protected].
Written by Jo Pusey
Associate Partner, Commercial Property at Franklins Solicitors LLP
Specialises in commercial and leasehold transactions, break notices, probate sales, lease variations, property financing, shared ownership, enfranchisement, adverse possession, and option and overage agreements.
Jo Pusey is an Associate Partner in the Bespoke and Commercial Property team at Franklins Solicitors LLP. She qualified with the firm in 2003 and specialises in a wide range of commercial and bespoke property matters, including commercial leases, acquisitions, disposals, probate sales, auctions, lease variations, shared ownership, and property financing.
Jo acts for clients ranging from large property developers to small owner-managed businesses, known for her pragmatic, efficient approach and strong commercial awareness. She prides herself on building long-term client relationships.
Outside of work, Jo enjoys travelling and is working on completing her Scratchable World Map. She is also an active member of the Northampton Musical Theatre Company.
