Commercial leases

Commercial leases are very different from residential ones, and especially different from short tenancies, such as assured shorthold tenancies.  In essence, there is no real statutory protection for the tenant – the tenant’s rights depend on the contents of the lease, not (on the whole) on any background law.

This is particularly so regarding repairing obligations: the landlord takes on no responsibility unless the lease says so – and usually then the landlord can charge the cost of maintenance work to the tenant through a service charge.  In the case of a “full repairing and insuring lease”, the tenant is responsible for ensuring that the property is always in good repair – whatever condition it might have been in when the lease started or the tenant took it over. Even under a short lease, therefore, the tenant can be taking on a heavy responsibility. Unless the property is newly-built with warranties and guarantees that the tenant can enforce, or a “nil maintenance” light industrial building, a wise tenant will arrange a survey of the property, to check on its condition; it may also be possible to limit the tenant’s repairing obligations be reference to a “schedule of condition” – best prepared by a surveyor, though a photographic schedule can be sufficient in appropriate circumstances.

One statutory protection that is available, but is often excluded, is the statutory right of renewal that can be exercised by the tenant when the lease period expires.  However, landlords often get tenants to agree to exclude this right – if only so as to improve the landlord’s bargaining position when the lease comes toi an end: if the tenant has given up his statutory rights but wants to stay at the property, she effectively has to pay what the landlord demands or move out, possibly in a rush, and possibly without suitable alternative premises are available.

In brief: commercial tenants have very few statutory rights – don’t give those that do exist too easily.

For more information, see our notes on Commercial leases and statutory rights of renewal or phone me (Justin Nelson) on 01580 767100


1 Comment

  1. You and your landlord may have made arrangements about the tenancy, and these will be part of the tenancy agreement as long as they do not conflict with law. Both you and your landlord have rights and responsibilities given by law. The tenancy agreement can give both you and your landlord more than your statutory rights, but cannot give you less than your statutory rights. If a term in the tenancy agreement gives either you or your landlord less than your statutory rights, that term cannot be enforced.

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