{"id":179137,"date":"2023-01-15T23:50:58","date_gmt":"2023-01-15T23:50:58","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=179137"},"modified":"2025-02-05T00:02:17","modified_gmt":"2025-02-05T00:02:17","slug":"long-term-commercial-leases","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/commercial-lease-property\/long-term-commercial-leases\/","title":{"rendered":"Key Differences Between a Short-Term and Long-Term Commercial Lease in the UK"},"content":{"rendered":"\n

As a business owner requiring commercial premises, knowing whether to take out a short-term or long-term commercial lease can be tricky. You are unlikely to estimate how long your business will be successful, so you want to ensure you only commit to a commercial lease that is viable for you. A commercial lease agreement is a legally binding contract. As such, you are tied to whatever lease term you select. Accordingly, you are committing to the rental payments for that period and your lease obligations in the lease agreement. Therefore, choosing a lease term that suits your business needs is essential. This article will explain some key differences between short and long-term commercial leases to help you decide which is best for your business.<\/p>\n\n\n\n

Understanding Commercial Leases<\/h2>\n\n\n\n

A commercial lease<\/a> is an agreement where a landlord<\/a> grants a tenant exclusive possession of commercial premises for a specific business use over a fixed term in exchange for rent. <\/p>\n\n\n

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UK Lease Assignment Template<\/div>\n
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If you are moving out of your leased space and assigning the lease to another party, you are required to notify your landlord and obtain their consent. Use this free proforma template for this purpose.<\/p>\n <\/div>\n \n\nDownload Now<\/a> <\/section>\n <\/div>\n\n\n\n\n

Most commercial leases typically have fixed terms between 1 and 25 years, with 1 to 3 years being the most common. The term is agreed upon between the landlord and tenant before entering into the lease. While this is usually fixed, you may negotiate<\/a> a break clause (effectively shortening the term when needed), or the term might function on a rolling basis. <\/p>\n\n\n\n

Short-Term Leases<\/h2>\n\n\n\n

Short-term commercial leases, typically lasting 1 to 5 years, have become increasingly popular due to the flexibility they offer businesses. They are common for office spaces and retail units. These offer a lower risk with less commitment – you may also be thinking of future expansion if you have growth plans for your business. <\/p>\n\n\n\n

Key features of short-term leases include:<\/p>\n\n\n\n

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  1. lower total rent value compared to longer leases;<\/li>\n\n\n\n
  2. potentially lower Stamp Duty Land Tax (SDLT) liability;<\/li>\n\n\n\n
  3. tenants are usually responsible only for the property’s interior, albeit this depends on the type of property being demised; and<\/li>\n\n\n\n
  4. more flexibility for business growth or relocation<\/li>\n<\/ol>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n
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