Commercial property lease

About this document

This lease has been drawn to let a retail unit or shop within a parade or block owned by the same landlord and where tenants share some facilities and services.

The unit could be used for any purpose, whether retail of goods, as a restaurant or cafe, or for service provision such as PC repair or travel agency.

The document 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.

Similar agreements

If you don't need service charge recovery provisions, use this lease instead.

If the tenant will also live at the property, we offer a lease for a mixed use property that includes a residential space.

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, 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
• guarantor
• service charge provision tailored for a unit that is part of a parade
• sub-letting
• 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 lease is one of a collection of templates designed for use by property professionals: experienced landlords, solicitors and surveyors. Accordingly, the provisions are very thorough.

If you are not familiar with leases, you may wish to look at our standard version for a shop in a parade. That version contains fewer technical provisions such as a draft authorised guarantee agreement, fewer landlord's warranties, and less detailed and extensive service charge provisions.

Within the extensive accompanying guidance notes, we have provided a discussion on use of security deposit agreement and a template for it.

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 agreement

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.

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.

Contents

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

The contents include 29 provisions and 4 schedules covering:

• rent: amount, other payments, interest on overdue rent, periodic review
• condition and repair of the shop
• alterations with landlord's consent
• tenant's positive obligations
• restrictions on tenant
• goods deliveries and vehicle management
• assignment of the lease
• 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: service charge provisions
• Schedule 2: rights reserved
• Schedule 3: 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 agreement is for more than seven years, the document 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.