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Commercial Leases

Whether acting for Landlord or Tenant we will ensure you fully understand the structure of the lease and the use of any schedules. We will advise on any break clauses, their operation and how any options which may be contained within the lease must be exercised.

A landlord granting a lease will want to maximise the payment of rent by a tenant but at the same time may need to consider granting a rent free period as an inducement to tenants. Unless for a very short term, the lease is likely to require the inclusion of a rent review provision and consideration will need to be given to the intervals at which reviews will take place, and how the new rent will be agreed.

The lease must deal clearly with repairing covenants, and must set out which are to be the landlord’s and which are to be the tenant’s responsibility.

How will the lease deal with alienation? Have the user covenants and provisions for alterations been given full consideration?

You may need advice on the position of Value Added Tax (VAT), whether an election to waive exemption to VAT has been made (the option to tax), and what is the consequence of such an election? Have you considered the VAT (and other) implications of any reverse premiums and rent free periods? Is there to be an agreement for the payment of legal costs incurred on the grant of the lease?

The position of SDLT (stamp duty land tax) will also need to be considered, both the rate payable and how it is calculated. Depending on the length of the term there may be a requirement to register the lease at the Land Registry, and in any event consideration should be given to noting the lease on the landlord’s registered title.