Commercial property lease

About this lease

This document should be used to let an industrial unit such as a workshop, factory, depot or warehouse that shares common facilities and services with other units let by the landlord to different tenants.

Commonly, this lease would be used for a unit on a small- to medium-sized estate, whether industrial or commercial in nature. Paragraphs within the lease provide for recovery of service charges such as for security, access, and utilities.

If you don't need provision for service charge recovery, see this alternative 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 between 1 and 30 years
• service charge provisions - specifically written for industrial units forming a park
• guarantor
• break provision
• rent review options
• opt-out of Sections 24-28 of the LTA 1954
• draft authorised guarantee agreement

This 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.

We offer another version for a unit on a park or an estate, which contains fewer technical provisions, fewer warranties, and less extensive service charge provisions.

Within the guidance notes we provide a discussion on use of security deposit agreement and a template for one.

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 relating to leases

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

Contents

The contents of the lease include 31 provisions and 4 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 delivery and vehicle management
• assignment
• preconditions for further development
• indemnities by the tenant and warranties by the landlord
• land registration
• security deposit
• insurance
• access for landlord
• guarantor
• termination: default notice by landlord; provision for premature termination
• forfeiture
• security of tenure excluded
• Schedule 1: service charge: allowing extensive provisions
• Schedule 2: rights reserved
• Schedule 3: draft authorised guarantee agreement
• Schedule 4: security deposit agreement
• Prescribed notices to be sent to tenant

If the length of the term is for more than seven years, the agreement must be registered with the Land Registry. We provide prescribed lease clauses at no additional cost that you can add to your document. There is no need to use these if your intended term is seven years or shorter.