Benefits of Engaging a Property Solicitor When Leasing Commercial Property in the UK

When you lease a commercial property as a landlord, you carry out a business transaction that involves a  significant amount of money. Commercial property leases are, therefore, a business risk, which, naturally, you hope will do well. However, by engaging a commercial property solicitor to assist you, you can increase your chances of success and reduce your legal risk. Furthermore, property law can be very confusing, so a property solicitor can help you as a commercial landlord to understand the legal requirements when leasing a commercial property in the UK. This article will explain the benefits of engaging a property solicitor when leasing a commercial property in the UK.

Commercial Lease 

A commercial lease is where you, as a commercial landlord, allow a business to use your property as its commercial premises. You give them occupation of a section or all the property, and they become your commercial tenant. In return, they will pay you rental payments. 

You will have a commercial agreement with your tenant which acts as a legally binding contract between you both. It will detail the terms and conditions of the commercial lease, such as:

• the lease term, which is the length of the lease;
• repair obligations; and
• any rent review clause.

Below, we list some reasons why you need a property solicitor when you lease commercial property in the UK.

Legal Documents

When you lease a commercial property in the UK, it can comprise the following legal documents:

• heads of terms;
• lease contract; 
• rent deposit deed; and
• licence for alterations.

As these legal documents bind you and the tenant to the commercial lease, it is essential to get them right. This is a crucial reason why you need a property solicitor when leasing a commercial property. 

Also, there are costs involved in drawing up the legal documents and negotiations to ensure you have the terms you require. Again, a property solicitor can guide you here and ensure your interests are met.

Security of Tenure  

As a commercial landlord, when leasing commercial property in the UK, you must decide if the commercial lease has security of tenure. This is something a property solicitor can advise you on.

When you include security of tenure in a commercial lease, it becomes a protected lease. However, the protection is for your commercial tenant. It follows that when they reach the lease term end, their lease will not end, and they will gain the right to renew it. An exception is if you have one of seven legal grounds to terminate it. 

Break Clause

When you lease a commercial property in the UK, consider the inclusion of a break clause. This allows either party to end the lease before the end term. Whilst a break clause can be helpful for either party, particularly your commercial tenant, you may need the advice of a property solicitor about including one and any conditions for using the break clause. For example, you may want to stipulate that the tenant must be up to date with their rent to use it. You may also wish to consider if parties can use the break clause at any point in the tenancy or exact dates only.

Rent Review Clause

A further benefit to engaging a property solicitor when leasing a commercial property is to assist you with any rent review clause you may wish to include in the commercial lease agreement. A rent review clause allows you to change the rental amount, usually only with an increase. A property solicitor will be able to advise you on the elements of the rent review clause, such as:

• the type of rent review, which may be an open market rent review;
• the frequency of reviews; and 
• whether to include an upwards-only rent review clause which is advisable for commercial landlords. 

Key Takeaways

As a commercial landlord, there are benefits to engaging a property solicitor when you lease a commercial property. A commercial lease can be complicated, and the agreement legally binds you. Therefore, it is important to get it right. 

A property solicitor can help with several aspects of your commercial lease. For example, they can draw up legal documents, including the final lease agreement. A property solicitor can also advise you of the content of the lease, such as the details of a break clause and whether you should opt out of security tenure or not. 

If you need help from a property solicitor with your commercial lease in the UK, our experienced leasing lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 0808 196 8584 or visit our membership page.

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