Commercial Lease Heads of Terms: what to look out for?
Commercial premises tend to be one of the biggest overheads of any business, with this in mind, it is important for a commercial tenant to have an understanding of the main terms of a lease.
Firstly, once a tenant has found commercial premises to rent the landlord and tenant must agree the Heads of Terms. This is a document setting out the principal terms of the new lease. This is usually agreed between either the landlord and tenant direct or their respective agents before solicitors are instructed. Although the Heads of Terms are not legally binding it may be difficult to amend these once they have been agreed and it is therefore important that prospective tenants understand what they are agreeing.
To help the parties our commercial property team have created a useful guide explaining the principal terms included in commercial Heads of Terms. The guide can be accessed here and covers:
- the Property
- the Term
- the Rent
- Rent Review
- Security for the Landlord
- Repair and Decoration
- Permitted Use
- Break Rights; and
- The Landlord & Tenant Act 1954 security of tenure provisions
Our commercial property solicitors are experienced in reviewing Heads of Terms and advising on these to help our clients secure an agreement in accordance with their business needs. If you would like us to review any proposed Heads of Terms in relation to a lease of commercial premises please contact our Head of Property, Julia Ferguson.