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Things to consider when taking a lease of commercial premises

It is important to read through the lease thoroughly and understand your full obligations.

Whether you’re taking on a new venture or your business is expanding, you might consider taking a lease of commercial premises. There are lots of good reasons to instruct a solicitor to review the lease and make sure nothing is overlooked.

A solicitor will be able to confirm that your future landlord has the required title and the legal ability to grant the lease.

Any lease must contain a proper description of the property you are renting and what you will be responsible for. It will specify the rent and when it needs to be paid. It will contain any rights that the landlord grants you and any rights the landlord reserves for itself. It is important to read through the lease thoroughly and understand your obligations with regard to the property.

A solicitor can confirm whether the lease actually reflects what you have agreed. Certain words and phrases have particular legal meanings or legal consequences that might not be apparent to someone who has not had legal training.  This is particularly the case with repairing obligations and break rights.  These can be worded in such a way so as to leave the tenant with financial liabilities that it didn’t expect – proceed with caution!

As you are using the premises for business purposes, it is important to check the ‘permitted use’ of the property to ensure you can carry out any relevant activities. What the lease allows and what planning regulations permit may be different things.

Another thing to consider is whether the lease will be excluded from The Landlord and Tenant Act 1954. As a business tenant you might have the right to remain in the property after the term of the lease has expired but the right is often excluded from the security of tenure provisions of the 1954 Act, then you will have to vacate the property on a specified date.

Once you have a lease in place, Stamp Duty Land Tax (SDLT) (or Land Transaction Tax in Wales) may be payable.  If it is, a Tax Return must be completed and SDLT must be paid within 14 days of the lease. It is also the tenant’s responsibility to register the lease with the Land Registry; you will need to do this if your lease is for longer than seven years.

Once the lease is completed, you must pay the rent and any other sums due and you are responsible for the property until the specified end date. At Gardner Leader we have an expert team dealing with all manner of landlord and tenant and lease work to make sure that your lease reflects what you have agreed and to avoid unpleasant surprises down the line.

Karron Whitter and Maya Peat, Gardner Leader Real Estate

For guidance on how Gardner Leader’s specialist Real Estate team can assist you visit our website gardner-leader.co.uk/services-to-businesses/real-estate/

 

 

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