{"id":183868,"date":"2023-11-15T00:43:51","date_gmt":"2023-11-15T00:43:51","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=183868"},"modified":"2023-11-15T00:43:52","modified_gmt":"2023-11-15T00:43:52","slug":"3-key-points-commercial-lease","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/commercial-lease-property\/3-key-points-commercial-lease\/","title":{"rendered":"3 Key Points Commercial Landlords and Tenants Should Understand in a Lease"},"content":{"rendered":"\n<p>Commercial leases grant a business owner the right to use a commercial property as their business premise. In return, the tenant pays their landlord&#8217;s rent. However, there is much more to understand than this about commercial leases. Commercial lease agreements contain many provisions which outline the rights and obligations of a landlord and their tenant. To highlight some of the points about commercial leases, we have chosen three key points commercial landlords and tenants should know in a lease in this article to start you off.<\/p>\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/4\/2023\/05\/04050959\/LegalVision-Landlords-Cheatsheet-for-UK-Leasing-Terms.jpg\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">Cheatsheet for UK Leasing Terms<\/div>\n            <div class=\"body-text\">\n                <p>This cheatsheet includes practical tips to understand key clauses and avoid disputes in leasing agreements.<\/p>\n            <\/div>\n            \n\n<a href=\"https:\/\/go.legalvision.co.uk\/cheatsheet-uk-leasing-terms.html\" class=\" block px-5 py-3.5 max-w-fit bg-orange button__hover transition rounded text-white font-bold text-lg no-underline uppercase leading-tight text-center\" target=\"\" rel=\"\">Download Now<\/a>        <\/section>\n    <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\">1. Contracted-Out or Security of Tenure?<\/h2>\n\n\n\n<p>A vital point commercial landlords and tenants should understand in a lease is whether or not the lease is a:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>contracted-out lease; or&nbsp;<\/li>\n\n\n\n<li>a lease with <a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/security-tenure\/\">security of tenure<\/a>.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Generally, the relevant security of tenure provisions of the <em>Landlord and Tenant Act 1954<\/em> automatically applies to most leases. Security of tenure protects the commercial tenant at the lease end term by granting the automatic legal right of lease renewal. As a result, a landlord can only refuse renewal on seven reasonable legal grounds.&nbsp;<\/p>\n\n\n\n<p>On the other hand, a lease agreement can \u2018contract out\u2019 of the automatic provisions. As a result, the lease does not renew at the lease end term, and the commercial tenant and landlord to decide whether to enter a new lease.<\/p>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>In this sense, a contracted-out lease significantly affects your rights as a commercial tenant or landlord, and the duration of the lease over the commercial property.<\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">2. Rent Review Clause\u00a0\u00a0<\/h2>\n\n\n\n<p>Rent review clauses are a crucial point commercial landlords and tenants should understand in a lease. This is because a rent review clause affects the level of rent a tenant pays and the landlord receives.&nbsp;<\/p>\n\n\n\n<p>A <a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/backdated-rent-reviews-commercial-tenant\/\">rent review clause<\/a> gives a commercial landlord the right to assess the level of rent their tenant pays at a specific point in the lease term. The rent will either remain the same or increase, although it can never decrease.&nbsp;<\/p>\n\n\n\n<p>The landlord reviews the rental amount, although the way they conduct their review depends on the rent review method specified in the lease agreement. This could be through:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>an open market rent review, which assesses rent depending on the amount of rent a similar property would go for on the market at that time;<\/li>\n\n\n\n<li>an index-linked rent review such as the retail price Index (RPI); or<\/li>\n\n\n\n<li>a stepped rent review.<\/li>\n<\/ul>\n\n\n\n<p>Therefore, it is essential to know that where a lease contains a rent review clause, the level of rent will increase at some point during the lease term. However, both parties should know that a commercial tenant can dispute this.&nbsp;<\/p>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+448081968584\" class=\"not-prose\">0808 196 8584<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    \n\n<div class=\"not-prose flex justify-center text-left gform_input_bg_white    \">\n    <script>\nvar 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Termination<\/h2>\n\n\n\n<p>In addition to understanding key points in a commercial lease about rent reviews and contracted-out or <a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/similarities-protected-and-non-protected-lease\/\">protected leases<\/a>, a crucial point to understand is about termination of leases. Both landlords and tenants should understand that a commercial lease has a fixed term. This means that once the lease reaches this lease end date, the lease is brought to an end and is no longer a commercial lease. However, this is not the case if it is a protected lease, as explained earlier.<\/p>\n\n\n\n<p>A key point to note about the termination of a commercial lease is that it can occur in multiple ways. A lease can also terminate if a landlord forfeits the lease. A commercial landlord may do this when:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the agreement says they can; and&nbsp;<\/li>\n\n\n\n<li>a tenant commits a serious breach of the lease terms, such as a failure to pay rent.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>A further example of how a lease can terminate is when it contains a break clause. This lease provision allows a party to the lease to end the lease in certain circumstances as long as parties to the lease fulfil specific conditions in the clause details.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Key Takeaways<\/h2>\n\n\n\n<p>If you are a commercial tenant or landlord, there are many points to understand about commercial leases. This includes:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>knowing whether your lease is a contracted-out lease or not;&nbsp;<\/li>\n\n\n\n<li>the implications of a rent review clause in commercial leases; and<\/li>\n\n\n\n<li>the termination of a commercial lease through various means, such as lease forfeiture or where a party to the lease uses the break clause.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>If you need help understanding key points commercial landlords and tenants should know in a lease, LegalVision\u2019s experienced <a href=\"https:\/\/legalvision.co.uk\/leasing-lawyers-lp\/\">leasing lawyers<\/a> 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. So call us today on <a href=\"tel:+448081968584\" class=\"AVANSERnumber dynamic-number\">0808 196 8584<\/a> or visit our <a href=\"\/membership\">membership page<\/a>.<\/p>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"913c5d18d7\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/183868\" \/>            <input value=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/3-key-points-commercial-lease\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"3 Key Points Commercial Landlords and Tenants Should Understand in a Lease\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Commercial leases grant a business owner the right to use a commercial property as their business premise. In return, the tenant pays their landlord&#8217;s rent. However, there is much more to understand than this about commercial leases. Commercial lease agreements contain many provisions which outline the rights and obligations of a landlord and their tenant.<a href=\"https:\/\/legalvision.co.uk\/commercial-lease-property\/3-key-points-commercial-lease\/\">Continue reading <span class=\"sr-only\">&#8220;3 Key Points Commercial Landlords and Tenants Should Understand in a Lease&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13326,"featured_media":183567,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"178955,3682,176692,182562,175163,3853","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[30],"tags":[85,519,1291,1361],"class_list":["post-183868","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-lease-property","tag-security-of-tenure","tag-terminate-lease","tag-rent-review-clause","tag-lease-clauses"],"acf":[],"yoast_head":"<!-- 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