Commercial property lease

About this document

This lease should be used to let office space (or space used for general business purposes) in any sort of multi-tenanted commercial premises.

The space could comprise of a suite of rooms, or one or more floors of the building.

We have drawn this agreement to maximise the capital value of the property and to provide acceptable security to a lender. The interest of the landlord always comes first.

Key features

Plain English is used throughout except where it is necessary to use legal terms common in this field of law.

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

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.

We include detailed service charge provisions to provide full recovery of service costs.

The other key features of this template can be summarised as:

• term up to 30 years - for long term leases over 7 years that require registration, prescribed lease clauses (PLCs) can be added easily
• detailed provisions relating to recovery of a service charge
• guarantor
• assignment and sub-letting
• break provision
• rent review options
• draft authorised guarantee agreement

Similar agreements

We have an alternative version for a suite of offices that contains fewer of the technical provisions and fewer landlord's warranties.

If you are letting an entire office building to a single tenant and therefore don't need to apportion and recover service charges, use this lease for an office building.

We also have a lease for a building on an estate or business park might be more appropriate. This version does include service charge recovery provisions if the property shares services with others.

The law in this lease

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

Contents

The contents include 29 provisions and 4 schedules covering:

• rent: amount, other payments, interest on overdue rent, periodic review
• condition and repair of the offices
• alterations with landlord's consent
• tenant's positive obligations
• restrictions on tenant
• deliveries and vehicle management
• 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: service charge: allowing extensive provisions
• Schedule 2: rights reserved
• Schedule 3: draft authorised guarantee agreement
• Schedule 4: security deposit agreement

If the term for which the property is let is for more than seven years, the details of 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 lease term is seven years or shorter.