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Bridge McFarland can offer you practical, uncomplicated advice, support & guidance when you need it most. Whether it be an employment dispute, family advice, an accident or negligence, life planning or moving house, let us help you.
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Our commercial team in Lincoln, Hull, Market Rasen and Grimsby prides itself on its sound business sense, commercial insight, local knowledge and first class understanding of the relevant legal disciplines ranging from employment law, business contracts, dispute resolution to agriculture and property development. From company formation to sale, succession, dissolution or dispute resolution, you can trust our team to deliver first class service and results.
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Frequently Asked Questions

Looking for some answers? Check out our helpful FAQs section.

Frequently Asked Questions
Home > Why BMcF? > Frequently Asked Questions > Commercial Property
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Commercial Property

 

Legal advice can help you understand the main issues for your business to consider both before and after a purchase or lease.

 

Commercial Property
Can I avoid rent reviews?
This is a matter for negotiation at the outset of the Lease. In shorter leases, you may have one rental figure for the duration of the lease. In longer leases, it may be possible to negotiate fixed increases (rather than rely on market conditions) throughout the Lease. You should take professional advice from a chartered surveyor as to what constitutes a market rent at the outset.
Can I extend my lease?
Generally speaking a Business Lease of at least six months will enjoy what is known as “security of tenure” under the Landlord and Tenant Act 1954. This means that once the lease period has expired the Tenant will be automatically entitled to a further lease at a market rent provided certain steps are taken.

The grounds on which the Landlord can oppose a lease renewal under the 1954 Act are limited (eg. where the Tenant is seriously in breach of his obligations, or where the Landlord intends to redevelop the property or use it for his own business). However, some leases are “contracted out” and do not benefit from this protection.

Can I get out of the lease early?
It may be possible to transfer the lease (often known by lawyers as “Assignment”) if you can find a willing tenant however it will be necessary for the Landlord to approve the new tenant. Alternatively, you should negotiate a break-clause entitling you to end the Lease on a specified date or dates during the lease.
Can I sell my lease?
The majority of leases will allow the Tenant to transfer (often referred to by lawyers as “assign”) the lease with the Landlord's consent. The Landlord may impose conditions on the transfer, such as:
  • the outgoing tenant enters into an authorised guarantee agreement (i.e. you may be obliged to guarantee the performance of the lease terms by the incoming tenant); and/or
  • the incoming tenant provides a guarantee.
Can I sublet?
Landlord’s will normally permit subletting, subject to their prior consent. The Landlord will want to approve the terms of the sublease.
Can the Landlord end the lease early?
The Landlord may have the benefit of a “break clause”. This is rare and for business continuity purposes you should be reluctant to agree to such a clause. However, the Landlord will have the right to terminate the lease for:
  1. Non-payment of rent; or
  2. A breach of the terms of the Lease; or
  3. The Tenant becoming insolvent.
Can you act for both Landlord and Tenant
Unfortunately the professional rules which govern our profession prevent us from acting on both sides of transactions such as this. Both parties must be separately represented.
How long should I take a lease for?
No one can be sure what the future holds. Whilst a long Lease may provide you with the security of knowing you will be able to occupy the property for a long period, it also exposes you to long-term liabilities.

For example, a fifteen year lease is a commitment to pay rent and comply with other obligations throughout a fifteen year period.  You cannot simply walk away from these commitments because you wish to relocate or because of financial hardship.  If you are entering into a new business venture there is much to be said for taking a short-term Lease with an option included in the Lease allowing you to take a further lease at the end of the term if you wish.

What if my lease is only for part of a building?
You should ensure that the property description in the Lease matches the physical description of the property. An accurate plan should be used. It is particularly important to establish what is and what is not included in the Lease (e.g. main walls/roof) as this could have an important bearing upon repairing responsibilities.
What is a “Contracted Out” Lease?
This is a Lease in respect of which the “security of tenure” protection of the Landlord and Tenant Act 1954 does not apply. You should be wary before agreeing a Lease on this basis. At the end of the lease period you will have no automatic right to remain in the property.
What is a “FRI” Lease?
This is a “full repairing and insuring lease”. A full repairing and insuring lease would impose both full responsibility on the Tenant for repairing and insuring the entirety of the property. This would include repairing the structure (i.e. foundations, roof, external walls).

If you are required to sign a full repairing lease you should try to negotiate that at the end of the term of the Lease you are not required to put the property into a better state than that which it was in when you take the Lease.  You could take photographs by way of evidence.

What rights do I need to include in the lease?
All necessary rights that you will need to enjoy the use of the property will need to be specified in the lease. These could include a right to access the property along a yard/passageway, a right to park, a right to store refuse and rights to access communal areas.
Who is responsible for planning permission at the property?
You should satisfy yourself that your proposed use of the property comes within the authorised use of the property for planning purposes. We can assist in this regard through making enquiries with the Landlord and searches at the local council.
Who is responsible for the insurance?
It is usual for the Landlord to insure the property however the Landlord will have the right to recover the premium from the Tenant. So you can budget, details of the Landlord’s Insurance Policy should be obtained in advance.
Will my rent increase every year?
A Lease of more than three years will normally contain a provision for Rent Review at regular intervals such as every third or fifth year. The rent will typically be increased to the market rate at the time of the review (known as an “open market rent review”).

Rent Review clauses are generally prepared on the basis that they prevent the possibility of a downward review. They tend to be upward only however this is a matter for negotiation at the outset of the Lease.