Business lease

About this document

This business lease has been drawn to let a retail unit in a parade of shops owned by the same landlord.

The shop could be for any purpose in Use Classes F.2, E, and 'Sui Generis' Examples are: retail of goods, restaurant or cafe, or service provision such as PC repair or estate agency.

The shop may or may not have additional space used for other business purposes, such as offices or storage.

Tenants are likely to share some facilities and services. This agreement allows for service charge recovery and use of shared facilities between tenants.

This lease does not cover additional space used for residential purposes. For that, see this alternative one.

The lease has been drawn to prefer the the landlord rather than the tenant.

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

Similar agreements

If a restaurant, cafe or fast food outlet will be operated from the property, a restaurant or cafe lease agreement is more appropriate. This document contains specific clauses for commercial kitchens and food retail.

If you don't require service charge recovery provisions, see this agreement for letting a stand-alone shop.

If the property will be used as an office, our lease for an office building is more appropriate.

We sell another version with a term greater than 7 years that contains some additional paragraphs covering more technical points. You might be interested in looking at this lease agreement for a retail unit in a group of similar units if you need any of the following:

• 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 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 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

Document contents

This shop lease is comprehensive, providing alternative choices for important decisions.

The contents include 30 provisions and 3 schedules covering:

• rent: period, amount, other payments, interest on overdue rent, periodic review
• condition and repair
• tenant's positive obligations
• service charge recovery
• restrictions on tenant: prohibited activities on the property
• signs and advertisements
• 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: the service charge
• Schedule 2: rights reserved
• Schedule 3: draft agreement for a security deposit

Scottish version of this lease

The law governing business leases is substantially different in Scotland as compared with England, Wales and Northern Ireland. In Scotland there is no equivalent to the LTA. Additionally, there is little legislation or case law. 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, please select "Scotland" from the list in top box.