Whether you are a commercial landlord or a commercial tenant in the UK, you will come across heads of terms when you draw up your commercial lease agreement for a commercial property. Heads of terms are significant because they represent the initial key terms your lease agreement will contain, such as a rent review clause. A lease agreement is a legal contract between a landlord and a commercial tenant which sets out the terms of the business use of the commercial property in return for rent payments. It also sets out obligations for both parties, which you will want to ensure are realistic for you as a tenant or a commercial landlord. This article will explain five critical points for commercial landlords and tenants about heads of terms in the UK. <\/p>\n\n\n\n
Heads of terms<\/a> are the document setting out the main terms for your lease agreement. These are the terms both parties agree upon. If you draw up your commercial lease agreement, it will include the details of these terms. For example, heads of terms may contain:<\/p>\n\n\n\n Heads of terms, therefore, set out the key commercial and specific terms you should include in the lease, even if you need to elaborate on them during the drafting phase. However, they are generally not legally binding on the commercial landlord or tenant.<\/p>\n<\/div>\n\n\n\n Let us explore five key points you should know regarding heads of terms for commercial leases in the UK.<\/p>\n\n\n\n A key point about heads of terms is how useful they are in resolving potential issues at the outset of the relationship between the commercial landlord and the commercial tenant. For example, suppose you, as the landlord or tenant, have specific expectations of the commercial lease or have different thoughts. Accordingly, you may raise them during the heads of terms negotiations. <\/p>\n\n\n\n Heads of terms enable you to resolve these differences before drawing up and signing a lease. Thereby, you can avoid raising issues after incurring substantial fees. <\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n\n
1. Resolve Issues at the Outset<\/h2>\n\n\n\n