Commercial Conveyancing

Landlord and Tenant

Many businesses find it convenient to lease their premises. One of the advantages of this arrangement is that it avoids a large capital payment at the outset which would otherwise be required to purchase the freehold. It does however also have a number of potential pitfalls which require particular care and consideration as well as proper legal and commercial advice.

When a business is new or relatively young, a landlord may well insist on the obligations assumed by the tenant under the lease being personally guaranteed by individuals, usually the Directors. Similarly the landlord may require a sum to be deposited by the tenant with the landlord by way of “rent deposit”. The landlord will be entitled to draw on the rent deposit if rent is not paid or if the tenant is otherwise in breach of the lease.

Many issues need to be considered in respect of the lease itself. For example the length of the lease and whether it is to be capable of being brought to an end before its full term by the exercise of a “break clause”. Similarly the rent payable by the tenant and when that rent is reviewed throughout the period of the lease are also very important issues.  One of the most important issues is the level of obligation which the tenant assumes in respect of the premises for their repair. This obligation can range merely from an obligation to keep the property in a state of repair in which it was on the date on which the tenant took occupation to an obligation on the part of the tenant to keep the premises in full repair. These matters are especially important when the lease comes to an end since if the tenant has not fulfilled its repairing obligations during the lease period the landlord is likely to raise a Schedule of Dilapidations requiring the tenant to bring the state of repair of the premises up to date in accordance with its obligations under the lease. A lease is simply a form of contract and failure by the tenant to fulfil its obligations under the arrangement will entitle the landlord to sue the tenant to enforce the obligations owed to the landlord or in some cases to obtain possession of the premises from the tenant.

In some cases a tenant may have a right to acquire a new lease from the landlord at the end of the existing lease but not in all cases. There are specific procedures in relation to this issue upon which detailed technical advice should be taken.

SL & Co can provide full technical assistance in connection with the legal issues raised by leasehold property and if you would like to discuss these issues any further please contact us for a friendly informal chat.

For further advice on commercial conveyancing, or to discuss your case, please contact us through the online enquiry form or telephone 01564 777250 Alternatively, visit our specialist conveyancing website for further information.

Conveyancing solicitors based near Birmingham. Law Society accredited business solicitors.Company, commercial and corporate solicitors based in the West Midlands.

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