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Can I sign a Commercial Lease without instructing a Solicitor?

Can I sign a Commercial Lease without instructing a Solicitor?

The answer is……Yes, you can.

Although using a solicitor when entering into commercial lease is not a legal requirement, it is however highly recommended. Having a solicitor review your lease ensures that you are adequately protected from onerous conditions and problematic leases.

What could possibly go wrong?

The Property

You may have difficulty identifying what property is being granted under the lease and how this is to be defined on a plan. As a Landlord or a Tenant, it is crucial to ensure the correct premises is being leased. It is vital to also consider any common areas used within the building, such as corridors or stairways if the premises forms part of a larger building. Confusion in relation to boundaries and common areas can cause major problems if dealt with incorrectly which can be extremely costly to rectify. 

Rent Review

Depending on the length of lease, there may also be provisions for rent review. Both parties will need to ensure that they are aware of when rent review is to take place. Careful drafting of the rent review provisions will be necessary and ideally should be prepared by a solicitor.

Landlords will want to make sure that there is an upwards only rent review clause in the lease, whereas Tenants would prefer to include an upwards and downwards rent review. Issues can arise when you agree to clauses which are disadvantageous and does not suit your business needs. Instructing a solicitor will ensure that whatever is agreed between the parties is reflected accurately in the lease prior to signing.

Repair Obligations

In a commercial lease it is standard for a Tenant to promise to keep the premises “in repair”. This can be problematic as it includes an obligation to put the property into repair even if the property was not in disrepair at the start of the lease. Instructing a solicitor will allow you to water down this obligation and negotiate so as a Tenant you do not need to keep the premises in any better state of condition or repair than they were in at the start of the lease.

Landlords will want the lease to obligate the Tenant to bear the costs of repairing the property, regardless of who carries the repairs out otherwise they will not receive the entire rental income due to outgoing costs. Careful drafting by a Solicitor will be required to protect the Landlord’s position in this regard.

Break conditions

From a Tenant’s point of view, it is extremely useful to include a break clause in the lease as it will allow some flexibility to bring the lease to an end. However, the Landlord will usually insert conditions that the Tenant must comply with in order to exercise the break option.

Without a solicitor you may agree to onerous conditions and be tied into the lease for the full duration. In these circumstances a Solicitor can ensure the break conditions are reasonable prior to agreement.

Security of Tenure

A Tenant who has occupied the premises for business purposes has a statutory right to a new lease at the end of the contractual term. However, there are number of instances when this law does not apply.

If the Tenant has agreed to exclude the security of tenure, then the Tenant will have no right to stay in the premises when the lease ends. It is therefore important to instruct a solicitor as they will be able to advise you on the implications of this.

On the other hand, it is important for a Landlord to instruct a solicitor should they wish to exclude the security of tenure once the lease expires to ensure correct notices are served in accordance with the law.

Get in Touch

There are lots of other issues that can have a detrimental effect on a commercial lease if you do not know or understand the full implications of what you are agreeing to.

At Levins Solicitors we have great experience in representing Landlords and Tenants in drafting and negotiating leases for commercial premises for over 30 years.

Our Commercial Property team can advise you on things you may wish to consider when granting or taking a commercial lease before agreeing to terms which may be unfavourable to you. They will be able to negotiate terms on your behalf and ensure that you are fully aware of any rights and obligations you may have under the lease prior to you signing.

Please give us a ring on 0151 480 7777 or email us on info@levinslaw.co.uk  and we will be happy to provide you with a quote.

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