Which Net Lawman business lease?

Article reference: UK-IA-LSE18
| 6 min read

The purpose of this article is to guide you to the business lease you need to let your property. You do not need to read it if you are already happy with your choice. It is a good idea to read the basics in our article about business leases.

Net Lawman business property leases are to some extent modular. That is to say that we try to use the same words in all leases to cover a particular topic. For example, the paragraph on "rent" in each lease is based on the same master version.

In drawing a new lease, first we decide what subjects we need to cover. This is based on commercial experience, differences in applicable law, and of course, on practical requirements of someone like you. That process requires a very large number of edits, most quite short, but requiring great care. We then have to assess what defined terms we need and re-draw them so as to be applicable to a particular lease.

Our leases fall neatly into three categories. First we have a small number of leases and licences drawn specifically for agricultural use. We have an excellent article on choosing between an agricultural lease, a farm business tenancy agreement and a licence. I will not add more here.

Now we come to business leases. We have around a dozen leases for different business use or applicable to different types of property. They are in two sets: a "professional" set for solicitors and property professionals, and a standard set, for property owners who want to let for under seven years and wish to avoid unnecessary complication.

The two versions are identical except that the professional set contain certain material which we have taken out of the standard set because it will be rarely needed. The material which is not in the standard set is:

  • Matters relevant only to leases for a term exceeding seven years: prescribed lease clauses, registration and stamp duty;
  • extensive sub-letting procedure and conditions (in our standard leases, we assume that you will not want to sublet, only allow assignment);
  • more extensive landlord's warranties: some tenants may demand;
  • extensive provisions to cover a situation where the tenant constructs buildings or engages in other development on the land / property.
  • provision for authorised guarantee agreement under the 1995 act (and a draft AG agreement).

The professional set does not assume solicitor-level knowledge. The carefully drawn drafting notes are very extensive, taking you through every provision.

If you need any one or more of the above, choose the commercial lease agreements.

How we have divided property use

The actual use matters less than the type of use. We have used the usual main property industry divisions: shop, office and industrial. Then we divide again, asking these questions:

  • Does the property stand alone or is it associated with adjacent property or upper floors or a larger building owned by the landlord. That makes a big difference to the covenants and the provision of services.
  • Is the property on some sort of "estate" whether vast or humble? That makes a difference to service provision and traffic problems. Let me make clear that if you are not a giant property company your industrial estate may consist in ten small units on two acres of land, or a large old shed you have divided up, or a collection of buildings transformed from some other use. Estate provisions provide for service charges, regulations on signage, traffic issues and so on.
  • Is open land more important than the buildings or plant attached to it? A lease of land is simpler than a lease of high value buildings, so this may be what you need for a plant nursery or scrap yard or car park.
  • What will the tenant be doing in the property - never mind what we call it.

What type of property are you letting?

Now for the standard versions.

  1. If it's a field, or plain agricultural land, you will need one of our agricultural leases.
  2. if you are letting one of a row of shops, for any use, we have called that a "parade" and the leases are Business lease: shop in parade.
  3. if the tenant can live above or if the upper floors are separately let, whether for business or residential use. Please use Lease of shop in parade with flat over.
  4. If you are letting a unit on land you call an estate, you probably own either the unit or the whole estate. We offer a lease agreement for an office unit and another for an industrial unit. There is little difference between these two.
  5. If your property has no connection with those at either side, or actually stands alone, its easy: you need for a shop, for office or similar use, or for a workshop. The law in these three is very similar.
  6. For a high street fast food, chipper, restaurant or any other lock-up outlet involving fixed plant and government regulation, go for restaurant lease agreement.
  7. if you have land, you might be letting it as storage space, for a scrap yard, or any other use. You might be including some secondary buildings or just a tough fence around. For that, use Business lease: land, either vacant or with plant or buildings. But if your use is as a car or lorry park, use Car park lease agreement.

What is in all our leases

We have given a web page to each lease. We really do tell you all about it. So if any of those above seems right for you, look at the detail by clicking the link. That said, all our leases are very thorough in their treatment of the law. We would need a whole book to tell you exactly what is included and why. But here are a few of the options in almost all of them:

  • guarantor
  • tenant may assign but not sublet
  • long menu of possible tenant's covenants
  • break provision
  • 3 alternative ways to review rent, and at periods you decide
  • provision for asbestos and environmental issues
  • any term up to 7 years (over 7 years, best to use the professional version because it deals with compulsory registration.)
  • full, simple, clear service charge provision where it might be needed (easy to delete if you do not)
  • strong clear obligations of tenant for repair
  • on-site vehicle management, on some leases only
  • security deposit / bond with draft agreement if you do not simply bank it
  • ss 24-28 provision to exclude renewal of tenancy on expiry of term.

Further information and useful documents

This is one of a series of articles about business or commercial property leases. Next, you might be interested in reading more information about transferring a lease to someone else.

We have a collection of business lease agreements for land, and for commercial and industrial properties that should suit all general needs. Mostly, these leases should be used for short terms (7 years or under). This category also includes our licenses to use property for business use.

We have another set of Commercial lease agreements aimed at professional developers, solicitors and surveyors that allow for registration of the lease at the Land Registry.

Please note that the information provided on this page:

  • Does not provide a complete or authoritative statement of the law;
  • Does not constitute legal advice by Net Lawman;
  • Does not create a contractual relationship;
  • Does not form part of any other advice, whether paid or free.
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