Leases – A Guide To Traditional Property

What is a commercial lease?

A commercial lease is a legally binding agreement for the occupation of office space – it is made between the landlord of a property (who typically owns it) and a business tenant (the company which will occupy it.)

This agreement gives you the right to occupy a very specific piece of space, if you stay within the rules of occupation (pay on time, use it for the right purpose etc.)

This right to occupy is something quite important – it means that if you keep to the rules, you can’t just be moved or thrown out. This security of tenure is something which historically has been very important for businesses – the security of having the legal right to occupy a space for years on end.

A lease is typically quite long – traditionally between 3 and 25 years although the most common seems to be 5 years with the possibility of break options after 3. Leases have been getting shorter and shorter over the last 25 years or so.

The shorter the lease, the less likely any rent-free, discounts etc. The longer, the more possible concessions.

Who is involved in acquiring a lease?

Most of the time there are 6 parties involved that occupy two competing parts of the transaction. Bear in mind that these are people involved before the lease is yours. Once it’s yours, there will be more people involved (but more on this later:

1) The landlord.

2) The agent representing the landlord.

3) The solicitor representing the landlord.

4) The tenant.

5) The agent representing the tenant.

6) The solicitor representing the tenant.

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