Commercial property lease: retail unit or shop

This lease is for letting a shop, restaurant or cafe where there is no requirement for service charge recovery. The unit may be one of a row, with or without high street frontage, or stand-alone. It may be just a retail space or it may have offices or other business space attached as well.
Suitable for use in: England & Wales
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About this document

This lease should be used to let a shop or retail unit that does not share services or facilities with neighbouring units owned by the same landlord. Therefore, provisions for recovery of service charges are not required and not included. The shop itself maybe part of a parade of other shops owned by other landlords, or it may be stand-alone.

The tenant could use the shop for any purpose including:

  • retail of goods, or services such as a lettings agency or dry cleaners.
  • restaurant or cafe

The shop may or may not have additional space used by the tenant for other business purposes, such as offices, storage or a commercial kitchen. This lease does not cover additional space used for residential use by the tenant, although we do provide one that does.

This retail property lease has been designed to maximise the capital value of the let property and to provide acceptable security to a bank or other lender. As drawn, the landlord's interest always comes first.

Similar lease agreements

If the shop being let is part of a parade owned by the same landlord, or uses shared facilities and services, use this similar lease that contains service charge recovery provisions.

If the property will be used as an office only, this document may be more appropriate.

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
  • for long terms that require registration, prescribed lease clauses (PLCs) can be added easily
  • guarantor
  • the shop is a self contained unit
  • sub-letting and assignment clauses
  • break provision
  • rent review options
  • opt-out of Sections 24-28 of the LTA 1954
  • draft authorised guarantee agreement: enables you to use the opt-out provisions of the 1995 Act
  • template for a security deposit agreement

This lease is one of a collection of agreements designed for use by property professionals: experienced landlords, solicitors and surveyors. Accordingly, the provisions are very thorough.

Our standard lease agreement for a shop contains fewer of the technical provisions, fewer landlord's warranties, no references to prescribed lease clauses and no options for sub-letting.

Within the extensive guidance notes to this lease, we have provided information 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 relating to 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
  • the Regulatory Reform Regulations 2003
  • the Joint Committee's Code for Leasing Business Premises
  • the RICS' Code on Service Charges


The contents of the document include 28 provisions and 3 schedules covering:

  • rent: amount, other payments, interest on overdue rent, periodic review
  • condition and repair of the property
  • alterations with landlord's consent
  • tenant's positive obligations and restrictions
  • assignment
  • sub-letting
  • 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: rights reserved
  • Schedule 2: draft authorised guarantee agreement
  • Schedule 3: security deposit agreement
  • Prescribed notices to be sent to the tenant

If the term is for more than seven years, the lease must be registered with the Land Registry. We provide prescribed lease clauses (PLCs) for long term leases free of charge for download here. 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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