Key points to consider Click to get info
You'll need to think about these key points and negotiate them with the landlord:
- Tenant details: you'll need to provide the landlord with references and financial information to the landlord, so they can be satisfied you'll be able to pay the rent.
- Property: the full details of the property should be included along with any additional rights the landlord is granting, such as the right to park a car, or access to a cycle store.
- Repairs: the 'heads of term' will set out who's responsible for keeping the property in a good state of repair, and what condition you need to hand the property back in, at the end of the term. You need to consider and understand the potential costs at the end of the lease, as you may be liable for putting the property back in a certain condition at the end of the lease
- Rent: commercial leases are usually an annual sum paid monthly or quarterly in advance. Rent can be paid on completion of the lease, or the landlord may decide that the tenant can have a rent-free period so rent payments will start on a future date.
- Term: you need to agree how long the lease will run. Depending on the length of the term, other clauses, such as a break clause, may be relevant.
- Assignment and underletting: depending on the length of the term, the landlord may allow you to 'assign' or 'underlet' the whole of the property. An assignment allows you to pass on the lease to someone else; an underlease allows someone else to use the property, but you, as tenant are still responsible for the property.
- Permitted Use: the use of the property must be recorded so that you know what you can use the property for.
- Break clause: the landlord needs to decide whether they, you, or both of you will be able to end the lease early on notice to the other. If a break clause is included, the date and any pre-conditions should be listed.
- Security of tenure: short-term leases are usually excluded from the statutory right to a new lease when the current lease ends.
- Rent deposit: if the landlord is concerned about whether you'll be able to pay, they can request that you provide a rent deposit as security. If so, the amount to be paid should be recorded in the heads of terms.
- Compliance: you, as the tenant, will be responsible for health and safety compliance.