I Am a Commercial Tenant in the UK. What Should I Know About Landlord’s Solicitor’s Costs? 

Signing a commercial lease is a significant financial commitment. As a tenant, you will have your costs to consider. Like you, your landlord will incur solicitor’s costs as part of the commercial lease arrangement. However, as a commercial tenant, you can incur some of these costs on their behalf. Therefore, you should be aware of these costs to budget and track finances correctly. This article will explain what a commercial tenant should know about the landlord’s solicitor’s costs in a UK commercial lease.

Commercial Leases  

A commercial lease is where you, as a business owner, occupy a commercial landlord’s property as your business premises. You do so for an agreed period and for agreed rental payments to be made by you as the commercial tenant. 

When you enter a commercial lease, you will sign a lease agreement with your landlord. This is a legally binding contract between both parties that governs the commercial lease and outlines both parties’ rights and obligations. For example, it will consist of:

• your repair and maintenance obligations in the lease;
• any rent review clause regarding how and when your rental amount may change;
• negotiated rights, such as a break clause;
• what you have to request your landlord’s permission to do; and
• any alienation clause.

Landlord’s Solicitor’s Costs 

Your landlord will incur solicitor’s costs as part of the commercial lease arrangement. You must be aware of what these can be because, as the commercial tenant, you can incur some of these on their behalf. Knowing these costs allows you to budget correctly. When you sign a commercial lease, you must track any additional costs from your landlord. 

What Costs Might I Incur? 

The initial solicitor’s costs a landlord will incur through a commercial lease is to draft it at the outset. Typically, the landlord’s solicitors do this rather than the tenant’s. This process involves negotiations between you and your landlord with revisions of the draft agreement. While the costs will depend on how quickly you can agree on the lease agreement terms, the costs your landlord may incur can be around £1000. However, if your landlord agrees on a fixed-price fee arrangement for the legal fees, the negotiation level is irrelevant. 

What Costs Will I Incur? 

There are other legal costs your landlord may incur as part of the commercial lease, which you must pay as the tenant. This is because property law details that they can legally request you to pay for the:

• enforcement of your covenants;
• notice costs for breaches of the covenant and forfeiture;
• notice costs from former commercial leases due to authorised guarantee agreements;
• schedule of dilapidations costs; and
• costs associated with requests you make to your landlord, such as assignment and alteration requests.

Key Takeaways

When you enter a commercial lease, you and your landlord will incur solicitor’s costs. This is because a commercial lease is a commitment for you and a risk to your landlord’s property investment, so you need to get it right. However, remember that you may incur some of the legal costs your landlord has to pay for the commercial lease. For example, this may include legal costs regarding your requests in the lease, such as altering the property or assigning your lease to a third party. 

If you need help understanding the costs you may incur from your commercial lease, 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. So call us today on 0808 196 8584 or visit our membership page.

Frequently Asked Questions