Business lease

About this document

This is an uncomplicated business premises lease for a separate letting of office or storage space in a building shared with a shop or other workspace.

For example, you may own a building occupied by a cafe on the ground floor that has empty rooms on the first floor. Using this lease, you could rent that unused space to a service provider, such as a cleaning company, that doesn't need the shop front.

The lease is one for a "short" term of less than seven years so that it does not need to be registered at the Land Registry.

There is no provision for service charge recovery. The amount of rent that you charge should account for the other costs bourne by the landlord.

Similar agreements

If your tenants share common services and facilities, such as security service charges, our lease for a unit in parade of shops may be more appropriate because it allows you to recover these costs.

If there is only one tenant in the whole building, you should use our lease for a self contained office building.

We also offer a lease for a retail unit or shop where the same tenant also rents office space within the same building. See our shop 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 1-7 years
• 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 relating to this document

Commercial property law is regulated primarily by the Landlord and Tenant Act 1954, which has been amended many times since.

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 to favour the landlord if possible.

Contents

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

You might not need all of these provisions. If not, we have structured the document so that any can be easily removed by simple deletion without affecting any of the other clauses.

The contents include:

• 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
• 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

Scottish version

The law governing commercial leases is substantially different in Scotland as compared with England, Wales and Northern Ireland.

Principally, in Scotland there is no equivalent to the English and Welsh Landlord and Tenant Acts, and 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.