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When entering a commercial lease, it is important that you understand the terms of the lease agreement. One of these terms may be ancillary rights. Put simply, ancillary rights in a commercial lease are further rights a commercial tenant has in a commercial lease. Since ancillary rights can impose further legal obligations throughout the duration of your tenancy, you should become familiar with them. This article will explain what ancillary rights are and their implications in a commercial lease.
This cheat sheet outlines what you should be aware of in your lease agreement.
What Are Ancillary Rights?
The primary right that a commercial landlord grants a commercial tenant is the exclusive possession of the property concerned. This means they have the right to sole occupancy of the property, so they can restrict both the landlord and third parties from entering the premises.
On the other hand, ancillary rights are further rights a commercial tenant has in a commercial lease. For example, they include a commercial tenant’s title and interest in the commercial property. In this sense, ancillary rights are additional to the right of exclusive possession since they help tenants enjoy their time in occupation of a commercial property as their business premises.
There are two main types of ancillary rights for a commercial lease which we explain below.
1. Implied Rights
The Law of Property Act 1925 grants some ancillary rights to a commercial tenant automatically. This means they do not need to be listed in the lease agreement but are implicit in every commercial lease agreement. Implied ancillary rights that affect a tenant’s enjoyment of the commercial property can be those concerning:
- fixtures;
- hedges;
- watercourses;
- privileges;
- easements; and
- the right to repair.
2. Express Rights
In a commercial lease, a tenant may also require ancillary rights to operate their business. That is to say, the tenant may require additional rights to use or occupy certain spaces that are particular to the commercial premises and the commercial lease.
Ancillary uses are rights that aid a tenant’s enjoyment of the property by supporting their primary use of the business premises. These should be in the commercial lease agreement to ensure the landlord gives them to the tenant. Ancillary uses can be, for example,:
- staff facilities in the commercial property;
- the use of staff facilities;
- rights of access to the commercial premises, such as the use of stairs in the property;
- the use of a staff kitchen; and
- the right to repairs and easements.
Key Takeaways
A commercial lease grants a commercial tenant the right to occupy the commercial property as their business premises. When a commercial tenant has occupation through a commercial lease, they have sole occupation or exclusive possession. This is the right to occupy the space and prevent anyone else from entering, such as the landlord or third party. However, in a commercial lease, there are rights that are ancillary to the right of exclusive possession. These ancillary rights arise from the fact that the tenant enjoys exclusive possession. Ancillary rights can be either implied rights or express rights. Implied rights are those the law grants, even if the rights are not expressed in the lease agreement. On the other hand, express rights are particular to the commercial lease, so they will be in the commercial lease agreement.
If you need help understanding ancillary rights in a commercial lease, LegalVision’s 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. So call us today on 0808 196 8584 or visit our membership page.
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