Business lease: shop in parade

This lease is for letting a single shop or retail unit in a multi-tenant parade owned by the same landlord. The shop could be used for any purpose under Use Classes A1, A2, A3, and A5; for example: sale of goods, restaurant, cafe or sale of services (e.g. estate agency or PC repair). Any upper parts of the building are let separately. Term: 1-7 years. Features: service charge provision; guarantor; break provision; rent review options; option for assignment; sub-letting not allowed; SS 24-28 opt-out; draft agreement for security deposit.

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About this lease

This business lease has been drawn to let a retail unit in a parade of shops owned by the same landlord. Tenants are likely to share some facilities and services. This agreement allows for service charge recovery and use of shared facilities between tenants. The shop could be for any purpose in Use Classes A1, A2, A3, and A5. Examples are: retail of goods, restaurant or cafe, or service provision such as PC repair or estate agency.

The shop may or may not have additional space used by the tenant for other business purposes, such as offices or storage. This lease does not cover additional space used for residential use by the tenant, although Net Lawman does provide one that does (see below).

The lease has been drawn to prefer the interest of the landlord rather than the tenant.

Provided the term of the lease is seven years or less, it does not need to be registered at the Land Registry.

Similar commercial lease agreements

We sell another version of this lease, aimed at property developers, solicitors and surveyors, that contains some additional paragraphs covering more technical points. You might be interested in looking at: Commercial property lease: shop or retail unit in parade if you need any of the following:

  • provisions for sub-letting
  • provisions for an authorised guarantee agreement
  • extensive landlord's warranties
  • references to land registration for leases with a term greater than 7 years
  • prescribed lease clauses

Key features

Plain English is used throughout except where it is necessary to use legal terms common in this field of law.

The key features of this lease template can be summarised as:

  • standard guarantor
  • options for transfer or assignment to another party
  • sub-letting forbidden
  • option to include a break clause for premature termination by the tenant
  • a choice of options for rent reviews
  • opt-out of Sections 24-28 of the Landlord and Tenant Act 1954

The law in this shop lease

Commercial lease law is regulated primarily by the Landlord and Tenant Act 1954, amended many times.

Account has also been taken of:

  • the Landlord and Tenant (Covenants) Act 1995;
  • the Regulatory Reform Regulations 2003;
  • the Joint Committee's Code for Leasing Business Premises;
  • the RICS' Code on Service Charges.

In balancing the codes with the law and the interest of the Landlord, we have followed the codes where reasonable, but have preferred the interest of the Landlord where there may be a difference.

Document contents

This shop lease is comprehensive, providing alternative choices for important decisions.

The contents include 30 provisions and 3 schedules covering:

  • rent: period, amount, other payments, interest on overdue rent, periodic review
  • condition and repair
  • tenant's positive obligations
  • service charge recovery
  • restrictions on tenant: prohibited activities on the property
  • signs and advertisements
  • assignment of the lease
  • indemnities by the tenant
  • security deposit
  • insurance
  • access for landlord
  • guarantor
  • termination: default notice by landlord; provision for premature termination (a break clause)
  • forfeiture
  • security of tenure excluded
  • Schedule 1: the service charge
  • Schedule 2: rights reserved
  • Schedule 3: draft agreement for a security deposit

Scottish version of this lease

The law governing commercial leases is substantially different in Scotland as compared with England, Wales and Northern Ireland. In Scotland there is no equivalent to the Landlord and Tenant Acts. There is little legislation or case law relating to leases in Scotland. So the version we have drawn for our Scottish user is common law based.

On registration of leases in Scotland, only commercial leases for longer than 20 years must be registered in the Land Register of Scotland. However, the lease is often registered in the Books of Council and Session in Edinburgh.

For the Scottish version of this lease please select "Scotland" from the list in top box.

Draftsman

This document was written by a solicitor for Net Lawman. It complies with current English law.

UK-PRlse15 - Business lease: shop in parade

 
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