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Things You Must Know Before You Sign A Commercial Lease

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Commercial Lease

One of the most significant commitments you will make for your business is when you sign a commercial lease. However, this blog is especially for start-ups and new businesses. The lease rent will be one of the company’s largest outgoings. And if the building is inadequate or the landlord fails to meet his obligations. It might have a severe impact on your business. In addition to the rent payable, it is not uncommon for commercial leases and agreements to contain over 50 pages of detailed provisions, all of which impact your bottom line. So, here’s what you should consider before signing one.

Choose the property carefully while you sign commercial lease

  • There are three primary factors to consider when looking for the ideal commercial property: location, usage, and planning approval.
  • You can’t alter the location of your business without paying costs after you’ve signed the lease, so be sure it’s right for you, whether you require passing trade for a retail location or staff accessibility for an office.
  • Make sure the landlord approves of the conditions and looks into the services provided by the local government.
  • Typically these are A1 General retail, A2 Financial and Professional, and A3 Food & Drink. The incorrect use necessitates the filing of a planning application to have it amended.

Work through the costs involved in commercial lease

Beginning a commercial lease can be an expensive business. In addition to the rent and business rates, you will also need to consider other costs, such as insurance and legal and surveyor fees. The tax and stamp duty is now payable by the tenant (2% on £150,001 – £250,000, 5% on £250,001+) plus there is a charge to register a lease with H.M. Land Registry if it has more than seven years on it (up to £910, depending on lease value). Also, remember that you may have to pay service charges for repairs, security etc..

Make sure you’re happy with the key provisions

  • It’s a must to get legal advice before sign the commercial lease document as you may have to negotiate some clauses. 
  • The term of the lease: This is the maximum amount of time you may stay in the building. There is no standard period for a commercial lease, though office leases last 5 years and retail leases often last 10. If you wish to be able to leave early, make sure to include a break clause; however, keep in mind that this may result in a higher rent. 
  • The cost of the rent: Most long-term leases include a rent review provision that empowers the landlord to raise the rent at any time.
  • If you have a long rent-free time at the beginning of your lease, be sure you know how much you’ll have to pay after it’s over. Keep in mind that many landlords advertise low rents but then charge high service fees to compensate.

Making changes to the building

  • Most leases allow a tenant to make changes with the landlord’s permission. If you think this is vital, check to see if the lease allows it.


  • Full repairing and insuring leases are common in commercial leasing. This means that the renter bears the cost of repairs as well as the obligation for seeing that they are carried out.
  • You may also be required to purchase insurance. Which is something you should prioritize if you are also liable for maintenance.
  • The physical state of the property is very important. If you are responsible for repairs, under a normal repairing covenant you may have to put the premises into a good state of repair. Rather than simply keeping it in the condition it is in at present. 
Service charge
  • Service charges are a very complex part of the lease and need careful consideration when the lease is being negotiated. There is, however, a Code of Conduct for Service Charges which may give you rights over and above those in the lease. The Code of Conduct for Service Charges may also provide some protection.
  • Once you sign the commercial lease will be bound by the contents of it. 
  • As most leases contain over 50 pages of detailed provisions, which can affect you financially. We would strongly recommend solicitor is instructed to interpret and negotiate the terms before the lease being signed.

    For Further information

    Contact Bizlaw U.K. We can help you with all aspects of the lease, connecting you to our specialist commercial property solicitors and safeguarding your interests at the negotiation stage. Get in touch by WhatsApp on 07583452230 or email when looking to get a commercial lease. We can also assist with other legal services. Please visit our website to find out about our range of holistic legal and business services, check our 5-star testimonials and watch our YouTube channel or listen to our podcasts. Please follow, like, and share our social media content if you find it useful.

Reina D'costa

Dual qualified, experienced, practical and proactive solicitor. Founder of Bizlaw UK, a new model legal service consultancy.