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A commercial lease is an arrangement where the property owner, the landlord, grants a third party, typically a business owner, the right to occupy the landlord’s property. The commercial lease agreement contains the terms and conditions of the lease, which include the rights and obligations of both the tenant and the landlord. One phrase you might find in a lease is ‘reservation of rights’ or ‘all rights reserved’, where landlords reserve rights in the commercial property. This article will explain what these terms mean in a UK commercial lease.
Legal Meaning
The phrase ‘reservation of rights’ or ‘all rights reserved’ is a legal term you will see in many areas where ownership is a significant issue. Ownership can mean creative ownership. For example, you may see the term all rights reserved:
- when a film reaches the end; or
- in music.
The copyright holder uses the phrase to assert their ownership. It means the copyright holder enjoys the rights that copyright law gives them for the piece of property they create. If you are the copyright holder, you effectively reserve all contractual rights to use your creation as you see fit.
Meaning of Reservation of Rights in a UK Commercial Lease
The term reservation of rights or all rights reserved is present in other industries too, including the property market.
Reservation of rights, or all rights reserved in a UK commercial lease agreement, allows a commercial landlord to clarify that they have the legal right to do certain things within the lease and with the commercial property. It grants the commercial landlord an element of freedom regarding the commercial property.
A common understanding of reservation of rights is the right to enter the premises or the right of entry.
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Examples of Reservation of Rights in a UK Commercial Lease
When commercial landlords exercise the reservation of rights in a commercial lease, they must ensure the tenant’s right to enter the premises is not unreasonably affected. Typical examples of reservation of rights include the legal rights of the landlord:
- to enter the property when they need to carry out any repairs;
- to terminate the lease where their commercial tenant has not paid their rent;
- to allow another tenant to occupy another part of the property as part of a separate commercial lease;
- to install and maintain items, such as pipes and wires;
- to restrict access to common areas of the property for repair or alterations to take place;
- for the landlord to enter the premises or another area of the land where specific conditions are met;
- to develop the neighbouring or adjacent commercial premises, which is something the tenant may know the commercial landlord had previously planned when the tenant entered the lease;
- for the landlord to have light and air;
- the right to support and protection; and
- to build even though it affects the commercial premises boundary in terms of building into it or on it.
Why is This Clause Important?
Reservation of rights is an essential aspect of a commercial lease. As a landlord, including this clause into any commercial lease agreement you form is in your best interests. Such a provision prevents a situation where you may need to perform necessary maintenance on the commercial property but are unable to do so until the lease term expires. If the reservation of rights provision does not account for such situations, you will have no legal right to perform such tasks. An exception is if you receive express permission from your tenant.
This cheat sheet outlines what you should be aware of in your lease agreement.
Key Takeaways
All rights reserved is a common provision found in commercial lease agreements in the UK. They benefit the landlord, allowing them the right to perform certain acts on the leased property, such as the right of entry. The benefit of including this provision in your commercial lease is that it affords you legal rights, for example, to legally enter the property to make necessary repairs or inspections.
If you need help understanding what reservation of rights or all rights reserved means in a UK commercial lease, contact our experienced leasing lawyers 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. Call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
Reservation of rights in a commercial lease is where a commercial landlord reserves rights to carry out specific actions during the lease term, such as the right to enter the property.
Commercial landlords may include reservations of rights in a commercial lease to allow them to both secure their rights, such as the right to terminate the lease if the tenant does not pay their rent and to perform the necessary maintenance on the commercial property.
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