Posted On / 13.10.2015

Tips and Traps for Commercial Tenants

Anna Austin - Consultant - Commercial Property DepartmentAcquiring new business premises can be an expensive process but getting the right legal advice from the outset can save significant expenditure in the future, says Anna Austin, Consultant Solicitor in Battens Solicitors’ Commercial Property Team.

It is an exciting time in the commercial property sector and we are seeing an increase in new instructions for leases of business premises, including units on trading estates and the high street.

Tenants often look carefully at opportunities to save on costs, but not instructing a solicitor when taking a new lease can be a false economy.

When acting for a tenant on a new lease, our role typically extends beyond reviewing the lease to check that all of the terms agreed with the landlord have been incorporated.

We will ask key questions, such as:

  • Are there covenants on the landlord’s title that would potentially prevent the proposed use of the property?
  • Has the landlord obtained the consent of its mortgage lender to the grant of the lease? Are you aware of the consequences of not obtaining this consent?
  • Do you know when the lease must be registered or, in some cases, noted on the Landlord’s title at the Land Registry?

Even some relatively short leases will be affected by the Land Registry’s requirements. This needs to be considered before completing the lease and making the application for registration at the Land Registry.

Another common aspect overlooked by tenants is stamp duty land tax as there is a common misconception that it only applies to purchases of property. Stamp duty land tax may also be payable on the grant of a lease. Failure to comply can result in heavy financial penalties as well as preventing successful registration at the Land Registry.

The detail of leases can also be a minefield for tenants without expert legal representation. It would not be unusual for a tenant to believe that the lease limits their responsibility to maintaining the current condition of the property but actually find later that their liability runs into thousands of pounds as they are actually required to put the property into a better condition that it was when the lease was granted.

At Battens, we endeavour to provide a realistic fee quote based on a tenant’s specific requirements whether the tenant just requires a summary of the lease in plain English or the full package including due diligence, lease negotiation, stamp duty land tax advice and addressing Land Registry requirements.

For more information, please contact me on 01935 846214 or