Shop lease agreement

This is a lease for a self contained lock-up shop that does not require provisions for service charge recovery. It could be in a parade or detached. It may be pure retail or it may have offices or other business space attached. The lease is suitable for Use Classes A1, A2, A3, and A5. Features: short term: 1 to 7 years; 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 shop lease agreement

This lease should be used to let a shop or retail unit that does not share services or facilities with neighbouring units owned by the same landlord. The shop itself may be part of a parade of other shops owned by other landlords, or it may be stand-alone.

The lease is suitable for any business in Use Classes A1, A2, A3, and A5.

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 adjacent residential accommodation. See below for alternative leases.

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

If a restaurant, cafe or fast food outlet will be operated from the property, use Restaurant lease agreement. This lease contains specific clauses for commercial kitchens and food retail.

If the shop being let is part of a parade owned by the same landlord, or uses shared facilities and services, use Business lease: shop in parade. This agreement contains service charge recovery provisions.

If the tenant will also live at the property, use Mixed use lease: shop in parade with residential space. If the property will be used as an office (rather than a shop), Office lease agreement may be more appropriate.

If you are still not sure, you can find more information at Which Net Lawman Business Lease?

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 template can be summarised as:

  • term of 7 years or under (often called a short term lease)
  • 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

This document has been drawn so as to make it applicable to the vast majority of leasing scenarios without making it difficult to edit. 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: retail unit or shop 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

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 29 provisions and 2 schedules covering:

  • rent: period, amount, other payments, interest on overdue rent, periodic review
  • condition and repair
  • tenant's positive obligations
  • 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: rights reserved
  • Schedule 2: 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-PRlse17 - Shop lease agreement

 
 
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