Industrial property lease: workshop, warehouse or factory
This lease has been drawn for letting the whole of workshop, factory warehouse or other industrial unit to a single tenant. There are no service charge provisions. Features: term: 1 to 30 years; guarantor; break provision; rent review options; ss 24-28 opt-out; options for assignment; no sub-letting; draft authorised guarantee agreement; draft agreement for security deposit; drawn for experienced property professionals.
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About this document
This lease has been drawn to let a factory, workshop, warehouse or other industrial building. There are no provisions for service charge recovery included - the property should not be part of a larger estate or business park owned by the landlord. The landlord is likely to be a property developer or an institutional real estate investor.
This industrial lease has been designed to maximise the capital value of the let property and to provide acceptable security to a financial institution. As drawn, the interest of the landlord always comes first.
Similar lease agreements
There is no provision for service charge recovery in this document. If you need this, perhaps because the unit shares services with others forming a small business park, see Commercial property lease: unit on industrial estate or business park.
If the property will be used as offices, Commercial property lease: office building may be more appropriate.
If the property is mainly land, with plant or buildings, Land lease: business use, with or without plant or buildings may be more appropriate.
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 between 1 and 30 years, that is, any usual commercial term (short-term by default)
- for long term leases that require registration, prescribed lease clauses (PLCs) can be added easily
- no sub-letting
- break provision
- rent review options
- opt-out of Sections 24-28 of the Landlord and Tenant Act 1954 (to exclude security of tenure)
- draft authorised guarantee agreement: enables you to use the opt-out provisions of the 1995 Act
- template for a Security Deposit Agreement
This industrial lease is one of a collection of commercial lease templates designed for use by property professionals: experienced landlords, solicitors and surveyors. Accordingly, the provisions are very thorough.
If you are not familiar with commercial property leases, you may wish to look at the standard version: Workshop lease agreement. The standard version contains fewer of the technical aspects such as a draft authorised guarantee agreement, fewer landlord's warranties, and no references to prescribed lease clauses.
Within the extensive guidance notes to this lease, we have provided a discussion on use of security deposit agreement and a template for such an agreement.
We have also included the forms required to exclude security of tenure. These include the prescribed notices to be given to the tenant 14 days before the new lease is created, a declaration of a new lease, and the statutory declaration if less than 14 days notice is given.
The law in this 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 tried to comply with the codes but nevertheless, have preferred the interest of the Landlord where there may be a difference.
This industrial lease is comprehensive, providing alternative choices for important decisions.
The contents of the lease include 29 provisions and 3 schedules covering:
- rent: amount, other payments, interest on overdue rent, periodic review
- condition and repair
- alterations with landlord's consent
- tenant's positive obligations
- restrictions on tenant
- goods and vehicles
- preconditions for further development
- indemnities by the tenant and warranties by the landlord
- land registration
- security deposit
- access for landlord
- termination: default notice by landlord; provision for premature termination
- security of tenure excluded
- Schedule 1: rights reserved
- Schedule 2: draft authorised guarantee agreement
- Schedule 3: security deposit agreement
- Prescribed notices to be sent to tenant to exclude security of tenure
If the term of your lease is for more than seven years, it must be registered with the Land Registry. We provide prescribed lease clauses (PLCs) for long term leases free of charge for download here: prescribed lease clauses. There are instructions on how to add these within the document. There is no need to use these if your intended term is seven years or shorter.
This document was written by a solicitor for Net Lawman. It complies with current English law.
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