When renting a property for your commercial business, you must ensure that you understand exactly what you are committing to. Although it can be tempting to rush the Lease process in order to commence trading from your new premises as soon as possible, this may leave you trapped in a costly agreement. When drafting or negotiating a commercial Lease, there are a number of intricacies involved that you must be aware of and where the advice of an experienced commercial property Solicitor is essential.

The clauses you want to find in the Lease

If you are leasing a commercial property, ensure that the wording is to the ‘Tenant’ instead of being personal to you, otherwise corporate benefits may be lost and it may be difficult to assign the Lease if your business is sold.

As a Tenant, you will have rights of assignment which enable you to assign your Lease if you choose to move premises and/ or sell your business. However, these rights should be checked, as the wording of this clause may sometimes allow the Landlord to refuse an assignment in certain circumstances.

In leasing a commercial property, you will generally require business facilities such as signage and parking, so it is vital that these details are included in the Lease. If your property is located in a commercial area, then check the Lease for exclusivity clauses to clarify whether or not a competitor can Lease a neighbouring property.

The Lease clauses you need to avoid

Running a business means that you cannot afford to ‘waste’ money, and accordingly you should be wary of ‘holdover’ and ‘percentage rate’ clauses. These clauses may commit you to paying two or three times rent if you stay on beyond your lease date and can entitle the Landlord to additional rent on top of your basic rent.

The location of your business may be essential to its success so you must ensure that your Lease protects this. Some Leases have relocation clauses that allow your landlord to move your businesses within a certain area or radius restrictions that prevent you from expanding your business within a certain radius of the property that you have leased.

Demolition and default clauses can result in you being forced out of your property if the property and/ or commercial area requires redevelopment or demolishment, and as such this is something that must be clarified in your commercial Lease.

Given the intricacies of negotiating a Lease for a commercial property, it is wise to seek professional help from a commercial property law Solicitor.

To see how we can help to safeguard your business or to discuss commerical property, please get in touch with Luke Hewitt on 01625 523988 or mail@jbgass.com