Commercial Property Lease Clauses by Ford Banks Irwin Solicitors - The Property Lawyers in Manchester
Please note: Not to be used or relied upon without legal advice. These notes are for illustrative purposes ONLYThe Commercial Property Lease usually starts in a prescribed form. Landlords Solicitors and Lawyers will prepare a Lease summary in a form approved by HM Land Registry and send it to the Tenant's Solicitors. The format helps the Land Registry employees understand the Lease and update the Land Registry Title Deeds. The format is essentially:-
1. Date of Lease;
2. Title numbers. All the Title Numbers affected by the Lease should be listed;
3. Parties to the Lease. This includes the Landlord, Tenant and anyone else such a Management Company or Guarantor; The full names are required as are addresses. If the client is a registered company the Solicitor should also add the Company House registration number.
4. Property description. The full description of the Property is provided together with several plans of varying scale which identify the boundaries. In many instances the Lease is only for part of an Office Building and so the common areas also need to be clearly marked on the plans.
5. Prescribed Statements;
6. Term of the Lease;
7. Premium;
8. Prohibitions or restrictions on disposing of the Lease. The Landlords Solicitors will usually refer to the clauses in the Lease that restrict subleases and assignments.
9. Rights of acquisition. This includes the Tenant's contractual rights to renew the Lease, to purchase the reversion or another Lease of the Property or to purchase an interest in other Property. The Tenant's covenants to surrender the Lease are also referred to here as are the Landlords contractual rights to acquire the Lease.
10. Restrictive covenants given in the Lease by the Landlord in respect of land other than the Property. For example adjoining Land.
11. Easements. This includes Easements granted in the Lease for the benefit of the Property and those reserved by the Lease over the Property for the benefit of other land.
12. Rentcharges affecting the Property;
13. Application for a standard form of restriction on the Title Deeds;
14. Declaration of Trust. This is where joint Tenants decide if they wish to hold the Property as Joint Tenants or Tenants in Common. The Tenants Solicitors will explain the implication of both means of holding the Lease.
The Landlord's Solicitors will usually send a draft Lease to the Tenant's Solicitors for approval. The Tenant's Solicitors then ask for any appropriate amendments and return the traveling draft Lease to the Landlord's Solicitors. It is important when time is of the essence for the Landlord's Solicitors to send out a draft Lease that requires little or no amendment. A draft Lease that is fair to the Tenant is likely to improve goodwill and Landlord / Tenant relations. For example, clauses such as:
(a) a curb on the Landlords powers to enter the Property could be limited by the Tenant's Solicitors to the effect that any interference should be minimised and limited to a reasonable period. Access to the Property should not be significantly affected. A Clause which has a period of consultation in it is likely to go down well with the Tenant.
(b) the Landlord agreeing to make good any damage caused in the exercise of the Landlords powers is likewise going to be treated favourably by the Tenant.
(c) In the case of a long lease the Tenant's Solicitors may seek to have the insurance policy taken out in the joint names of the Landlord and Tenant or alternatively to have the Tenant's interest noted on the Policy.
(d) Lease clauses which are acceptable to a Mortgagee are likely to be treated favourably by the Tenant.