Leasing commercial property can be an exciting step for business owners. However, it is important to understand the terms and obligations that a lease contract imposes on both landlords and tenants. Having an experienced commercial lease solicitor on hand can demystify the complex world of legal terminology and lengthy contracts. Our lawyers have years of experience advising clients on all aspects of commercial property law.
Negotiation
Whether acting on behalf of an investor, developer or corporate landlord commercial property solicitors are responsible for dealing with a wide range of legal issues, both contentious and non-contentious, that concern the sale, purchase, development and lease of commercial real estate. With property being continually bought and sold, commercial contracts being negotiated and public sector buildings like railway stations and new shopping centres being built there is always a good level of activity within the commercial property market which means that experienced Commercial Property Solicitors are in demand.
A good commercial property solicitor will be able to negotiate the best possible terms for their clients when leasing space. They will have in-depth knowledge of the property industry and the local area, including the major commercial land holders and how they operate their leasing processes.
Negotiating a lease contract is a complex process, but it’s important to get every detail right in order to protect your business interests. A good solicitor will ensure that your contract is legally binding and enforceable while also taking into account the current state of the property market. They will also consider any future changes in the market which could impact the value of your business.
It is also a good idea to have your solicitor prepare searches and enquiries prior to entering into any negotiations with the Landlord, this way they will be well informed and able to provide you with advice as to the most appropriate negotiating positions. These searches can reveal a number of things such as planning permissions, whether the landlord has the legal power to grant a lease or not and a wide range of other information relevant to your particular transaction.
Once the lease documentation is prepared and agreed it is generally passed back and forth between solicitors on a number of occasions (commonly referred to as heads of terms) until a format is achieved that is acceptable to both parties. In the meantime, your solicitor will be preparing a report on the key terms of the lease which can be used as an aide-memoire moving forwards as regards the core obligations which you will be bound by under the terms of the contract.
Drafting
Commercial Property Solicitors deal with legal issues, both contentious and non-contentious, that concern the ownership or renting of land or premises by commercial clients such as investors, developers, retailers and public sector organisations. The drafting, reviewing and negotiation of contracts is a key aspect of this role and requires knowledge of the latest commercial laws.
It is important for both landlords and tenants to seek the advice of an experienced commercial property lease solicitor, particularly in relation to the terms of a lease. This can help to ensure that a lease is fair and reasonable for all parties and complies with current law. The solicitor will also be able to advise a client on their repairing obligations and the risks associated with dilapidation claims.
Using a solicitor when purchasing or leasing a commercial property isn’t a legal requirement but it is highly advisable. There are a number of different legal documents and processes that need to be followed, all of which can be complicated and time consuming, especially given the high financial stakes involved.
A solicitor’s expertise in commercial property leases will help to save time and money by avoiding the need for lengthy negotiations. This will ultimately lead to a smoother completion process and ensure that the final document meets all of the parties’ requirements.
It is also vital that the right advice is obtained when negotiating the terms of a lease as there are many terms and conditions that need to be considered, including the ability to sublet or assign the property and whether it will allow for changes in use of the premises. A solicitor with experience in commercial leases will be able to provide the best possible outcome for their clients.
Once the heads of terms have been agreed it is then a matter for both parties’ solicitors to draft all of the associated documentation and then negotiate any issues that arise from responses to pre-contract enquiries or searches. This usually involves going back and forth on the documentation over a period of 2-3 weeks and can be very time consuming for all parties.
Preparation
In order to be able to properly draft and negotiate commercial property leases, solicitors must possess a range of different skills. For example, they must be able to understand the different commercial interests involved in the transaction and how these can conflict with one another. They must also be able to determine whether buying the freehold or taking a lease is more appropriate for each client’s business needs.
Commercial property law is a highly specialised field, so it’s important to find a lawyer who has the experience and expertise to deal with your particular situation. An experienced solicitor will be able to take the time to thoroughly examine your commercial property transaction and provide you with detailed advice and guidance. They will be able to explain complex legal matters in everyday terms and help you make decisions that are right for your business.
When a property is being sold or taken on a lease, there will be a number of stages before the actual documentation can be prepared and exchanged. The first stage is usually the preparation of heads of terms which is a non-legally binding statement of the key points that both parties agree to in the transaction. These will usually cover things like the nature of the transaction (purchase or lease) and the key price issues. The head of terms will then form the basis for any subsequent contract and/or lease documentation.
Once the heads of terms have been agreed and circulated to both parties and their solicitors, they will act as a green light for the legal process to begin. A solicitor will then prepare a report on the terms of the transaction for the tenant’s approval/records and will also start to prepare draft lease documentation.
A lease is a long-term commitment on the part of both landlords and tenants, so it’s important to get the best legal advice possible to ensure that you are getting the most value for your money. An experienced solicitor can help you negotiate the finer details of a commercial lease so that you are protected against unexpected changes in the market or any other unforeseen circumstances.
Review
A commercial lease is a key legal document that sets forth the rights and obligations of both landlords and tenants. As such, it’s vitally important for both parties to carefully examine this document before signing on the dotted line. An experienced solicitor will be able to identify any areas where the terms are unclear or that may negatively impact business operations.
Most businesses do not own the premises they operate from and instead occupy them under a lease paying a market rent. It’s not a legal requirement to use a solicitor for a commercial property purchase or lease but it is highly recommended given the high financial stakes and lengthy periods of commitment involved.
Tenants are typically required to pay a deposit, which varies by market and location. Commercial landlords may be able to charge more than residential landlords for this deposit, depending on the market, the creditworthiness of the tenant and the cost of any improvements (or custom alterations) required before occupation. An experienced solicitor will be able to negotiate the best terms possible for tenants. He or she will also be able to advise on the maximum deposit amount that is permitted by law.