Commercial leases

Most businesses sign the lease for their premises at a moment when something else is more urgent: the move, the opening date, the first customers. The document usually comes from the landlord, it looks standard, and the rent is often the only figure anyone negotiates. Years later the same document decides whether the business can be sold together with its premises, whether a shop may start selling something new, and who pays when the building around it is renovated.

A commercial lease is a long relationship written in advance, and it has to anticipate changes in the business, in the building and in the people on both sides of it. Beyond the rent and the term, a well-drafted lease settles:

• the rules on the use clause, exclusive trading rights and whether the landlord may let the next unit to a competitor;
• the rules on rent-free periods, fit-out contributions and the other incentives offered to secure a tenant;
• the rules on service charges, what a landlord may pass on to tenants and how those costs must be accounted for;
• the rules on assignment and subletting, and whether the lease can go with the business when it is sold;
• the rules on alterations, the tenant’s own fit-out and whether the premises must be returned to their original state;
• the rules on the landlord’s access, works in the building and the disruption a tenant is expected to tolerate;
• the rules on guarantees from a bank or a parent company, and on how long they bind the guarantor;
• the rules on insuring the building, and on who bears the loss when the premises are damaged or destroyed.

Our lawyers can support you with this.