Which Net Lawman business lease?

The purpose of this article is to guide you to the business lease you need to let your property.

You might want to start by reading an introduction to business leases first.

Agricultural business

First we have a small number of leases and licences drawn specifically for agricultural use. We have an excellent article on choosing between when to use an agricultural lease and when to use a licence agreement.

All other business

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 that 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 allow subletting of the property, only allow assignment).
• more extensive landlord's warranties that 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.

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. 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.

Type of property

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 lease to use is 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 then use Mixed use lease: shop in parade with residential space.
4. If you are letting a unit on land you call an estate, you probably own either the whole unit or the whole estate. We offer a lease agreement for a suite of offices (or an office unit) and another lease agreement for an industrial unit.
5. If your property has no connection with those at either side, or actually stands alone, you need a shop lease agreement, an office lease agreement, or a workshop lease agreement.
6. For a high street fast food takeaway, restaurant or any other lock-up outlet involving fixed plant such as commercial kitchen equipment, 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 a land lease agreement. But if your use is as a car or lorry park, use car park lease agreement.

Terms in all our leases

The following terms are included in our leases:

• 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
• 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.