Mixed use property lease: shop or commercial unit with residential space
This is a comprehensive mixed use lease for letting a retail unit that also has residential space used by the tenant, e.g. a shop with a flat above. The unit could be used for any purpose: retail of goods, restaurant, cafe or services. Features: term: 1 to 30 years; guarantor; full service charge provision; break provision; rent review options; assignment and sub-letting options; ss 24-28 opt-out; draft authorised guarantee agreement; draft agreement for security deposit; drawn for experienced property professionals.
- Solicitor approved
- Plain English makes editing easy
- Guidance notes included
- Money back guarantee
About this document
This lease should be used to let a commercial property that also includes space that will be used for residential purposes by the tenant. The most common example would be a shop with a flat above.
The tenant could use the commercial space for any purpose including:
- conventional retail of goods
- restaurant or cafe
- provision of services such as PC repair or estate agency
The unit may or may not have additional space used by the tenant for other business purposes, such as offices, storage or a commercial kitchen.
The lease provides for the residential space to be part of the business letting, regulated by the Landlord and Tenant Act 1954 and not the Housing Act 1988. The agreement includes an extensive menu of tenants' covenants to protect every aspect of the landlord’s interest.
Paragraphs relating to a full recovery of a service charge allow this lease to be used for a shop that forms part of a parade owned by the same landlord and that shares common services with other units in the parade. However, the document could be amended to remove these clauses if the property is not neighboured by others belonging to the same landlord.
The landlord is likely to be an experienced property developer or an institutional real estate investor.
This 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.
We offer two similar documents for shops where the tenant does not live at the property as well. Use Commercial property lease: retail unit or shop if the shop does not share services or facilities with other neighbouring shops owned by the same landlord, or Commercial property lease: shop or retail unit in parade if you require a provision for service charge recovery.
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 shop lease 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
- residential space attached to the commercial unit is let to the same tenant
- suitable for a shop, a restaurant, a cafe, or customer facing service provider (e.g. estate agent) with a flat above.
- service charge provision
- assignment and sub-letting options
- 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 document 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: Mixed use lease: shop in parade with residential space. The standard version contains fewer of the technical aspects such as authorised guarantee agreement provision, fewer landlord's warranties, and less detailed and extensive service charge provisions.
Within the extensive guidance notes to this document, 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 document
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;
- Landlord and Tenant Act 1954;
- 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 shop lease is comprehensive, providing alternative choices for important decisions.
The contents of the document 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
- tenant's obligations for the residential space
- responsibility for others
- restrictions on tenant
- goods deliveries and vehicle management
- 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: service charge
- Schedule 2: rights reserved
- Schedule 3: draft authorised guarantee agreement
- Schedule 4: 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.
What other customers thought
Average customer rating
By Michael Tighe 01 June 2013
Seems to cover most issues and good guidance notes.
By Sarah Dedakis 02 April 2013
Useful and appropriate.
"I have used you in the past and am always impressed!"Diane Bantten (Acquit Debt Recovery)
"Good Information ,Help & documentation at the right cost True Value for Money."Solar Systems
"I was recommended to you some time ago - many thanks for an excellent document. I have you in my favourites Easy to navigate website - clearly displayed and simple to understand. Very easy to use and edit document in clear English. It has enabled me to present a professional and relevant document to my customers with ease. I will recommend Net Lawman due to easy to use website, documents in clear English and easy to edit, very reasonable and prompt."Martha Walker