Do I Need A Solicitor To Lease A Commercial Property?

What is a commercial lease agreement?

A commercial lease agreement is a contract usually between two parties, a landlord and a business tenant. It details the rights and responsibilities of the parties in granting the tenant the right to use a property for their business. These typically contain significantly more complex clauses and require a longer-term commitment than a residential tenancy.

Without understanding the process, it could be tempting to sign and enter a lease without engaging a solicitor. However, the legal intricacies, complex clauses and unfamiliar jargon can quickly become overwhelming.

What does a commercial property solicitor do?

Understanding the process that a solicitor will go through and the issues they will deal with is key to understanding why it is never recommended to enter a commercial lease without legal advice.

Mitigate Risks

One of the primary reasons for engaging a solicitor to assist you with your commercial lease is to mitigate and minimise your business risk.

Commercial leases are generally tailored to protect the landlord’s interests who will typically have legal representation. Solicitors for a landlord help with the initial lease drafting. A solicitor acting for the tenant can help level the playing field by thoroughly reviewing the complicated clauses, identifying potential issues and negotiating more favourable terms on your behalf. Their legal knowledge and expertise will identify unreasonable terms which may impose onerous obligations leaving you exposed to liability or financial burdens.

Ensure Legal Compliance

A lease agreement is a binding contract often with multiple legal nuances that need to be understood and complied with. Unsurprisingly engaging a solicitor will help you identify and adhere to the legal requirements, regulations and procedures. These may not be easily identifiable without knowing what to look for.

Lease agreements require compliance with local laws, industry standards, and health and safety regulations; points which may not be explicit in the lease. There are also key procedures which are not included within the lease itself. For example, for leases over a certain threshold, HMRC requires the filing of a stamp duty land tax return within 14 days of the new lease completing. If this deadline is missed then penalties will be issued, something which could be easily avoided with the right knowledge. Furthermore, depending on the term of the lease, there may be additional Land Registry requirements and registrations, which need dealing with. This process can be complicated if you are unfamiliar with the required forms.

Security of tenure

A solicitor will also discuss with you any relevant implications of the Landlord and Tenant Act 1954 which governs commercial property leases in the UK, including security of tenure which can give a tenant the right to occupy a property and limit a landlord’s rights to take the property back after a lease expires.

It is important to get this process agreed early and to factor in relevant notices as part of completing the new commercial lease

Identify points of Negotiation

A solicitor can identify unfair clauses and ambiguous language suitable for further negotiation. A commercial lease may contain details of any rent reviews, timeframes and methods by which a landlord can increase rent. A solicitor can protect against extortionate and unmanageable rent rises for tenants while also ensuring certainty for all parties.

Solicitors can identify responsibilities and obligations of the tenant such as repair obligations, or landlords, such as dealing with insurance claims.

Avoid Future Problems

We always find that prevention is more cost-effective than litigation. Our dispute resolution team often support clients facing a claim for breaching a term which they did not understand correctly at the time of agreement. These costly mistakes can have significant financial implications which outweigh the initial investment of instructing a solicitor to review and negotiate before you execute your commercial lease, in turn, saving your business from future costly legal nightmares.

How much do solicitors charge for a commercial lease?

Each lease and every business are different. Our team will take the time to understand your particular circumstances and will work with you to tailor our level of involvement and the costs for achieving your desired outcome.

How can JLN help?

Whilst it is often tempting to try and enter your commercial lease without support in order to save costs, the potential consequences often far outweigh any initial savings. A solicitor brings specialist knowledge, experience, and negotiation skills that can protect a business’ future viability. With their guidance, you can sign your commercial lease with confidence and rest assured that your rights and interests remain protected through an agreement that is fair and favourable.

The Jonathan Lea Network has a team of Commercial Property Solicitors in Haywards Heath.

To book an introductory call with one of our team, please send an initial email to wewillhelp@jonathanlea.net  (with a brief description of the matter) and one of our team will liaise with you to fix a time to speak to one of our specialists.