Thursfields’ Commercial Property team can help and guide you with a new lease, renewal or end of lease, including preparing, checking and negotiating leases for office units, factories, warehouses, pubs and shop leases.
We also offer advice to landlords who are experiencing difficulties with tenants be it in respect of paying sums due under the lease or performing their lease obligations. We advise landlords as to their options should they experience a tenant entering into a form of insolvency. Equally, Thursfields can also advise tenants if they are experiencing difficulties with their landlord performing their own obligations under a lease.
Before entering into a commercial lease we recommend Heads of Terms are agreed between the parties and recorded in writing. Whether you are a Landlord or Tenant, the following key factors should be considered:
The length of term may depend on the circumstances of a business, if the tenant’s business is a start up business, they may not want to commit to a lengthy term.
Security of Tenure
If security of tenure provisions are excluded from the lease, the Tenant has no statutory right to continue to occupy the property when the lease term expires. The Tenant will be required to negotiate with the Landlord for a new lease before the expiry of the term in order to remain in occupation of the property.
This provision can allow either the Landlord or the Tenant, or both, to end the lease before expiry of the lease term, on an agreed ‘Break Date’. In our start up business example the Tenant may want numerous Break Dates in the lease whereas a Landlord would want to limit those so they limit the risk of their property becoming vacant.
This is a mechanism whereby rent may be increased by the Landlord at particular times in the lease, and the frequency of these occurring will depend on the length of lease and the negotiating strength of the parties.
The above outlines some, but not all, of the matters to be addressed in Heads of Terms. We recommend both parties give them careful thought before proceeding, and make them as detailed as possible to avoid the need for further negotiations, and delay.
In addition to the usual obligations of a commercial lease, you should also consider the following when taking a lease of a pub;
It is often the case that a brewery will lease a pub to a tenant, tying the tenant in to buying the majority (or perhaps all) of the brewery’s drinks. The quantities and prices may be fixed by the brewery. The business efficacy of a pub tie needs to be considered, as a breach of the terms of the tie will amount to a breach of your obligations as tenant and could result in the forfeiture of the lease.
You will need both a premises licence and at least one personal licence for the sale of alcohol. For a Tied Pub, the brewery may deal with the transfer of the licences into your name. Additional licences may be necessary if for example, you intend to play music.
An Asbestos Report and a current Fire Safety Assessment should be checked to ensure any requisite remedial steps have been taken. Equality legislation also requires that any reasonable adjustments are made to the pub to accommodate people with disabilities.
Signing up to a lease is a major commitment for any individual or business and in these trepid times for the High Street taking on a lease of Retail Premises (a “Shop Lease”) could be viewed at the higher end of the risk scale.
Tenants can often find they are offered “standard” terms but only become fully aware of what they have signed up to when it’s too late. At Thursfields we are regularly instructed by retail clients (large and small) and we help them avoid the pitfalls that regularly trap the unwary in a Shop Lease.
We have a highly skilled and experienced team of lawyers who will not only ensure that you are fully aware of all the obligations imposed by a Retail Letting but who can also advise and negotiate terms that you feel comfortable with.
We can also assist you with the sale and purchase of commercial lease property, as well as assisting with on-going lease management matters, such as lease renewals, assignments, rent deposit deeds and licences to alter.
Before committing to entering, negotiating or ending a lease please give one of our Commercial Property solicitors a call.
Our lawyers’ recent experience includes:
- Acting for a large specialist hospital in London on various commercial property matters including the purchase of the head lease of premises in Harley Street, London.