Business lease

About this agreement

This lease is for letting land that may or may not include buildings or items of plant and machinery.

The property could be used for any purpose, from plant or equipment storage, to a scrap yard, to a garden centre or timber yard or farmers’ marketplace.

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

Similar agreements

If the land is to be used for parking agricultural vehicles, lorries or cars, then this agreement is more suitable.

We also sell a similar version of this agreement that contains the following less commonly required terms:

• 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 agreement 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 LTA 1954

The law in this document

Law with respect to letting land 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

We have followed the codes where reasonable, but have always preferred the interest of the landlord.

Contents

This template is comprehensive, providing alternative choices for important decisions.

The contents include 30 main provisions and 2 schedules covering:

• rent: 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
• goods and vehicles
• 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 agreement

Scottish version

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.