Commercial Lease & Letting - England & Wales

For use in commercial property letting (such as a shop, workshop, warehouse or office). We offer two types of commercial lease template, as described below. One for a long-term lease, the second for short-term (up to three years). Scroll down for Scotland.

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Commercial Lease (short), normal Word .doc £14.95 inc VAT Buy Now
Commercial Lease (short), advanced Word .dot £22.42 inc VAT Buy Now

Further Information

When leasing business premises in England and Wales it is important to have a written agreement setting out the duties and responsibilities of the parties, particularly in relation to the repair and maintenance of the building being rented.

There are different types of commercial property letting agreements, the most common being a commercial property lease.

A key distinguishing element of a commercial lease (as opposed to a licence to occupy) is that it grants exclusive possession upon the tenant. This means that the Landlord cannot enter except in certain circumstances outlined in the lease and, subject to any rights reserved to the landlord, the tenant can exclude anyone else from the property and can exercise all the rights of the owner in respect of the lease, such as allowing a sub tenant to occupy the premises under a sublease agreement. A lease is a contractual obligation but it also creates an interest in property. It must therefore be granted for a distinct period of time but can roll on beyond the fixed term detailed in the contract. In such circumstances it will become a 'tenancy at will' and will then be terminable by notice.

The business property leases below are for use in letting all types of commercial property (such as a shop, workshop, warehouse or office) to a business or individual tenant. We offer two types of commercial lease templates (or "commercial tenancy agreements"), as described below. The first is suitable for a long-term lease, the second for a short-term lease (from a few months up to two or three years).

Commercial Property Lease Agreement - Long Term (England and Wales)

This commercial property lease is suitable for the occupation of all types of property. It can be used for whole buildings as well as part of buildings and units on an estate. The landlord insures the property and is reimbursed by the tenant and a rent review clause is included.

Where the property is part of a building, the landlord undertakes to provide services that include the repair and maintenance of the structure and exterior of the building and its common parts, the tenant contributing to the costs of such maintenance by means of a service charge. Such a lease is referred to as a full repairing and insuring lease, or FRI. An FRI lease is the shortened term for a lease which imposes full repairing and insuring obligations on the tenant, relieving the landlord from all liability for the cost of insurance and also repairs.

In relation to the insurance provisions in the FRI (part of building) lease, the landlord insures the property and the tenant repays the premium to the landlord. The landlord will usually insist on insuring the property as he or she is then in control and can ensure that the property is properly insured at all times. In the case of damage or destruction to the property, the lease provides that the lease will not terminate automatically if the premises are destroyed and the lease continues at least for the time it takes for the premises to be rebuilt - normally for up to three years. The lease provides that in those circumstances payment of the rent is to be reduced rateably to match the extent of the damage provided the damage or destruction is as a result of an insured risk.

The commercial lease template (long term) is suitable for use where the tenant is an individual, a partnership or a company. This lease is not suitable if either the landlord or tenant is a charity. This version of the commercial property lease template includes the various declarations for communication between the landlord and tenant, to permit (as an option) the lease to opt out of the Landlord and Tenant Act 1954. This gives the tenant and landlord the potential to agree that the tenant cannot apply to the court for an extension to the lease. If you choose not to opt out of the Act, then special notices are required to be used by tenant and landlord when considering a subsequent extension or renewal of the lease. These are fully explained in Section 25 Notice and Section 26 Notice.

The grant of a lease for longer than 7 years must be registered at HM Land Registry as must an assignment (i.e. the transferring from one tenant to another) of a lease which is not registered and has more than 7 years left to run. Any lease granted for a term of more than 7 years for a property registered with HM Land Registry must commence with a set of prescribed clauses known as clauses LR1 to LR14. The Commercial Lease includes these clauses. This Commercial Lease is also suitable for use when the property is not registered or the term of the lease is 7 years or less.

Commercial Property Lease Agreement - Short Term (England and Wales)

This Short-Term Commercial Lease is suitable for the short-term occupation (from a few months up to three years) of all types of commercial property. It can be used for whole buildings as well as part of buildings and units on an estate. The obligation to repair the property rests with the landlord and there is no service charge. No rent review clause is included since the Lease is assumed to be of short duration and there is an absolute prohibition against assigning or subletting or sharing occupation of the property. The tenant's obligations are limited. There is no obligation on the landlord to insure the property and therefore no obligation on the tenant to pay the costs of any such insurance but if the landlord decides to insure, the costs will be included in the rent which remains fixed for the term of the Lease. The Lease also includes the option for a break clause (where either party may terminate the Lease from a given date on giving notice).

The lease includes the various declarations for communication between the landlord and tenant, to permit (as an option) the lease to opt out of the Landlord and Tenant Act 1954. This gives the tenant and landlord the potential to agree that the tenant cannot apply to the court for an extension to the lease. If you choose not to opt out of the Act, then special notices are required to be used by tenant and landlord when considering a subsequent extension or renewal of the lease. These are fully explained in Section 25 Notice and Section 26 Notice.

Sample

You can view samples online of completed Lease Agreements for Commercial Property here: Long or Short.

Features

These commercial lease template packages are suitable for use in England and Wales and include the following documents. The short lease package does not require the last 3 documents listed.

This package is also available as part of a Property Annual Subscription (£70.50 for own use) or a Full Annual Subscription (£199 for own use). These subscriptions give you access to wide range of documents, packages and forms for a single annual discounted fee.

If you are a letting agent then you will need: Letting Agency T&Cs - standard T&Cs for a property letting agency.

Scottish Version

The Scottish Commercial Property Leases are similar in scope to the England and Wales version, with the same differences between short and long term leases with regard to responsibility for repairs and maintenance, and service charge on tenants. A key difference is that there is no requirement for the range of forms and notices that are necessary in England and Wales. Only the Lease document itself is required.

Commercial Lease (long), normal Word .doc £24.95 inc VAT Buy Now
Commercial Lease (long), advanced Word .dot £37.41 inc VAT Buy Now
Commercial Lease (short), normal Word .doc £14.95 inc VAT Buy Now
Commercial Lease (short), advanced Word .dot £22.42 inc VAT Buy Now


 
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