A lease can be granted for a particular floor in a building or a building in its entirety.

Commercial leases are generally more complicated than leases of residential properties and must be carefully negotiated and drafted in order to avoid possible complications further down the line.

In this blog, our experienced Commercial Property solicitors give their top tips for negotiating commercial property leases.

1. Know your business.

It is important to undertake a thorough evaluation of your business and its operations to completely understand its needs before beginning a search for commercial premises.

This will ensure you secure an appropriate space or building that meets your requirements.

Consider things such as access for your customers/clients including any who may have mobility issues, whether you will need to include toilet facilities for your customers/clients such as a disabled toilet, whether you will need rear access for deliveries, whether you, your staff or your customers/clients will require parking, whether your premises will need to include a back office/staff area including a kitchen area and toilet facilities for the staff. Also factor in the cost of security measures such as the installation of a safe and CCTV.

It might be helpful to undertake an audit of your or a similar business’s existing business practices and consider how your operation might develop in years to come.

If you anticipate your business growing significantly, you should consider a commercial lease that is ‘future-proof’ to meet not only your current needs but also your future ambitions.

2. Do your homework.

Researching market data and gaining an insight into comparable trends will help you build up a clear picture of current trends.

Being informed about the overall commercial property market in your desired location and for premises similar to those you will require will enable you to quickly recognise the right opportunity and move quickly to secure it.

3. Seek legal advice.

Commercial leases can be complicated, and often contain words, phrases and legal jargon that are confusing and difficult to understand

It is always advisable to seek legal advice from an experienced commercial property solicitor if you are considering entering into a commercial property lease.

A solicitor will ensure that any lease is comprehensive and protects your interests.

If you encounter any issues during the lease term, a lawyer with experience in commercial property will also be able to advise on dispute resolution options.

At Beverley Morris & Co. Solicitors, we deal with various matters involving commercial leases, such as the grant of new leases and the purchase of existing leases.

Our experience extends to all forms of commercial buildings and premises used for various purposes. We have successfully handled commercial leases relating to shops and offices, pubs, cafeterias, restaurants and takeaways as well as industrial buildings such as light industrial units.

When acting for you in your commercial lease transaction, we will aim to break down the issues for you so that they are easier to understand. We will also endeavour to achieve your objectives regarding timing and so on insofar as practicalities will allow.

To speak to our Commercial Property Lease solicitors, please call us on 020 8852 4433 or make an online enquiry.

4. Read the small print.

A standard commercial property lease typically includes information about:

• The type of property being let.
• The length of the lease.
• The type of tenancy (for example, whether it is for a fixed term or can be renewed periodically).
• Information about the level of rent and how it will be paid.
• The types of activity that can be carried on at the property.
• Details of any security deposit required.

A commercial lease will also set out the responsibilities and obligations for both the landlord and the tenant, such as:

• Any improvements the landlord is responsible for.
• What improvements the tenant is responsible for.
• Whether the tenant is allowed to sublet the property.
• Notice provisions for termination of the tenancy.

Business tenants looking to secure new commercial premises must read the contents of the lease carefully to ensure they aren’t signing up for something unintended or unexpected.

Remember, it can just as easily be something that doesn’t appear in a commercial lease that is problematic as a clause that is included, which is why the input of a legal professional with experience in commercial property leases is vital.

5. Negotiate terms.

A commercial lease needs to fit your needs and that of your business. Don’t simply sign the first contract you are presented with. Read the terms and conditions carefully and be prepared to negotiate the contents of the lease to ensure that you are happy with what it includes.

Signing a new lease is the opportunity to include certain terms that protect your interests. Any omissions, errors or discrepancies that are uncovered further down the line could be problematic.

Some clauses to consider including in a commercial lease include:

• A break clause. Many tenants with to include a break clause as it allows them to end the lease if they wish to terminate the relationship before the fixed term expires.
• Assignment and subletting. Subletting the property or transferring the lease from one party or another can afford a tenant with more flexibility.
• Right to alter the property. Some leases include explicit terms about what alterations are allowed.
• Force majeure. This allows either the landlord or tenant to suspend certain terms of the contract if an unforeseen event occurs that is beyond the control of the parties, such as a hurricane or a pandemic.

A solicitor can advise on any added protections a commercial lease may need.

Commercial Property Solicitors Blackheath

A commercial property may be required for different purposes, whether as somewhere from which to run your business, as an investment to let to an occupying business, or as residential premises from which you will receive a rental income.

Our commercial property solicitors at Beverley Morris & Co. can assist you whether you are a buyer, seller, landlord or tenant.

We understand that your commercial property is typically the most valuable asset on your balance sheet.

Our solicitors will offer their wealth of experience, industry knowledge and specialist advice to ensure that you fully understand your obligations and can fulfil them to the best of your ability, leading to an efficient and seamless transaction.

To speak to us today, please call 020 8852 4433 or email enquiries@beverleymorris.co.uk.

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This is partly due to legislative change, such as the introduction of the Minimum Energy Efficiency Standards (MEES), which came into force in April 2018 and required commercial landlords to abide by minimum requirements for energy performance certificates (EPC) in business premises. 

Under current MEES requirements, landlords of commercial properties in England and Wales are prohibited from granting a new lease unless the property has an EPC rating of E or higher (except where certain exemptions apply). 

Many forward-thinking commercial landlords are also embracing environmentally friendly products and solutions, with green leases, in particular, gaining in popularity. 

In this blog, our Commercial Property Lease solicitors consider some advantages of green leases for commercial landlords. 

What are green leases? 

A commercial property lease is a legal agreement in which rent is paid from a tenant to a landlord to use land or a building for business purposes for an agreed period. A lease can be granted for a particular floor in a building or the building in its entirety. 

A green commercial property lease serves the same purpose. However, a green lease contains a series of additional clauses that impose obligations on the landlord and tenant to help manage and improve the environmental and social performance of a building. 

What sort of clauses are included in a green lease? 

Green leases incorporate provisions for the landlord and the tenant to undertake specific obligations to minimise carbon emissions arising from a property’s sustainable development, operation, and occupation. 

‘Soft’ green pledges can be as simple as requiring a tenant to turn off the lights at the end of every working day or asking a company to ‘go paperless’. 

Green lease provisions can relate to various aspects of a building’s usage, including: 

• Energy efficiency measures, including a commitment to a certain EPC rating.  
• Targets for energy and water consumption. 
• Waste reduction and recycling. 
• Data sharing, for example utilities consumption. 
• Methods of travel to and from the buildings. 
• Materials used in the fit-out and any refurbishment to the property. 

Why are green leases important? 

Commercial buildings make a significant contribution to greenhouse gas emissions.  

Property agent Savills states that real estate is currently responsible for 40% of global annual CO2 emissions and 40% of natural resource use.  

Offices and other commercial properties that are being built today can address these issues at the point of construction.  

However, if redevelopment continues at the same rate, 80% of buildings standing today will still be in use in 50 years. This means that much existing commercial property stock needs to be made more energy efficient retrospectively. 

The Royal Institution of Chartered Surveyors (RICS) has urged parties to include green clauses in commercial property leases. Solicitors are also encouraged to discuss with clients whether to include green provisions in leases we produce and negotiate.  

Green clauses are not limited to new or renewed leases. Where a lease is already in place, parties can enter into a memorandum of understanding (MoU), which provides a roadmap for co-operation between the parties to increase the sustainability of the property. 

If you are a commercial landlord and would like to include a green clause in a new or existing lease with a tenant, Beverley Morris & Co. Solicitors can help. To speak to our Commercial Property team today, call 020 8852 4433 or email enquiries@beverleymorris.co.uk.  

What are some of the benefits of green leases for commercial landlords? 

Green leases offer numerous advantages to both landlords and tenants.  

Some of the benefits of green provisions in commercial real estate leases for commercial landlords include: 

• Protecting the long-term value of the property. 
• Future-proofing buildings against anticipated regulatory changes. 
• Helping buildings adhere to expected disclosure standards. 
• Assisting in following clients’ environmental, social and governance (ESG) or net zero strategies. 
• Responding to tenant and investor demand for sustainable buildings. 
• Protecting or improving asset capital and rental value. 
• Encouraging mutually beneficial behaviours with tenants. 
• Incentivising tenants to use the property efficiently. 
• Enhancing corporate brand and image. 

Commercial Property Solicitor Blackheath 

At Beverley Morris & Co. Solicitors, we deal with various matters involving commercial property, including green leases. 

Our experience extends to all types of commercial buildings and premises used for various purposes. We have successfully handled commercial leases for shops and offices, cafeterias, restaurants and takeaways, and industrial buildings such as light industrial units. 

Our specialist commercial lease solicitors represent both landlords and tenants and can advise on all matters relating to commercial property leases, including: 

• Negotiating lease terms of a new lease and lease renewals. 
• Memorandum of rent reviews. 
• Deed of variation of a commercial lease. 
• Assignment. 
• Business sale. 
• Break clauses in a commercial property lease. 
• Commercial sub-lease agreements. 
• Property searches. 
• Stamp Duty Land tax and Land Registry formalities. 

If you need advice on any issues relating to commercial property leases, our specialist and friendly solicitors at Beverley Morris & Co. can help. We will advise you on the best course of action for your situation and help and support you at every stage. 

To speak to our Commercial Property team today, call 020 8852 4433 or email enquiries@beverleymorris.co.uk. 

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