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Commercial Property Leases Explained

Commercial Property Leases Explained

 

I. Overview

A commercial property lease is a formal agreement to rent a Leasehold building, land or space for business purposes. 

A standard lease agreement will consist of a Landlord or Lessor granting exclusive possession of the demised space to a Tenant or Lessee for a specified term and rent. The Lease will specify all terms and conditions of the agreement between the parties. The agreement will be signed by all parties and is a legally binding document. Both parties should be fully aware of what terms the Lease contains. Both parties will normally instruct a qualified solicitor to finalise the Lease agreement once the main terms are agreed within a Heads of Terms document, and to explain and advise on implications of the Lease Terms. 

The following sections highlights important areas to consider when reviewing your lease or are looking to agree terms for a new lease.

Virtual Commercial has created straightforward templates to allow clients to analyse an existing Lease, with our Lease Summary Sheet and various Heads of Terms Templates to agree a new Lease or sale for every type of commercial property transaction.

The main Laws and Regulations governing Commercial Property in the UK are the Landlord and Tenant Act 1954 and Agricultural Tenancies Act 1995. The former regulates the vast majority of non-residential Leases; the latter only applies to agricultural businesses (farming). 

All commercial leases have different terms and implications, if you have concerns about any issues when reading a Lease or drafting Heads of Terms to agree a new Lease, Virtual Commercial clients can contact us by email for further guidance or seek confirmation from your solicitor.

 

II. Common Lease Vocabulary

Demised Premises:

The demised premises are the parts of the premises that the Leaseholder or tenant is exclusively permitted to occupy. It is essential that the demised premises are explained correctly. This may be set out in terms of an address with an optional additional description. A Lease should include a plan with the demised premises clearly edged in red. The extent of the demised premises may include; other parts of a building (perhaps including cupboards, 

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Commercial Property Leases Explained
2016-05-09 21:56:48

Commercial Leases Explained.pdf