Best Way to Review a Commercial Lease Agreement
All parties should review a commercial lease before signing. It
is very important to instruct a solicitor to guide you through the
contract and finalise the terms.
Landlords need to ensure their property remains profitable, and
so from time to time will want to review the amount of rent
charged for the premises. The tenant on the other hand wants
the rent to remain affordable. A commercial lease solicitor will
negotiate the best possible terms.
Rent reviews are usually written into the lease. They should be
decided by tenant and landlord from the outset. They can be set
to any time frame, but often conform to a three to five year
review where the rent can be renegotiated.
Typical Clauses to Look Out For in a Commercial Lease
Keep an eye out for who covers the cost of insurance.
Generally the landlord will have the building insured, but
anything that is the property of the tenant must be insured
Beware of any service charges written into the tenancy. This is
a regular payment, independent of rent, that has to be made to
the landlord for supplementary upkeep and/or repairs to the
Commercial Lease Break Clauses
Make sure you know whether there is a break clause in the
contract. A break clause means that the lease can be terminated
before the end date. A break clause is an agreed specific date
where the lease can be discontinued. A tenant must usually
give six months notice to this effect. A landlord must have the
specific agreement of the tenant to bring this clause into action
on their part.
The tenant should also be certain that the building can be used
as they intend, and that they have full use and access to the
premises. If the tenant requires alteration of the space this must
be discussed, documented and legally written into the lease.
Any rights not mentioned in the lease itself should not be taken
Both tenant and landlord will have particular obligations during
the course of the tenancy. This may include redecorating the
interior of the rented area for the tenant, and general upkeep
and maintenance for the landlord. These obligations will be
accommodated during the arrangement of the tenancy.
So, if you want to ensure that you end up with a commercial
lease that fits you, and your business needs, it is imperative that
you work with an experienced commercial lease solicitor.