Lanyon Bowdler's legal team provide services to commercial landlords and tenants so that you always know your position in relation to commercial property leases, not only when a dispute arises, but from the very outset of any lease negotiations and tenant agreements.
This is an extremely broad field of commercial property law, so it's crucial that you obtain the services of a highly rated full-service legal team. At Lanyon Bowdler we have worked in this area for many years and have a deep understanding of the legal issues that apply on a national and regional level alike.
From our offices in Shropshire, Herefordshire and North Wales, we cater to many commercial property clients from the Midlands, The Marches and Mid and North Wales; however, our expertise reaches beyond those regions and we can advise on commercial leases anywhere within England and Wales.
Below we will look in more detail at some of the aspects of commercial property leases you might need to consider as a commercial landlord or tenant, and how we can help you to navigate this process without increasing your exposure to unnecessary legal risks.
In general, we will investigate the issues relating to your lease and identify any specific aspects that need consideration.
This may include - but is not limited to - any of the following topics:
Ensuring the landlord or tenant has the right to end the lease early, while also protecting both parties against the financial impact and business disruption of doing so. Careful consideration needs to be given to the conditions applicable to a break and the means of serving notice.
Drawing up new commercial property leasehold agreements or renegotiating existing terms which no longer suit the interests of the landlord, tenant or both parties.
Protecting landlords in the event a tenant sells their business and wants to assign the lease to another party, and defining what happens if that consent is not granted.
Defining who owns the fixtures in commercially leased properties, who takes ownership of them when the property is vacated, and any remedial work the tenant must carry out if the removal of fixtures leaves visible damage.
Key terms agreed in advance of the full lease. This gives both parties an idea of their rights and responsibilities, which can then be addressed in more detail in the full leasehold agreement.
If the tenant is unable or unwilling to keep up with agreed rent payments, it's beneficial if both parties know what the recovery process will be, including how much can be recovered, any penalties, fees and interest charged on the arrears, and alternative remedies such as the removal of assets.
Defining the terms of future rent reviews is essential so both parties know when and how the amount payable can vary - usually, although not always, increasing over time in line with inflation (such as linking to the retail prices index) , market values ( including independent expert assessment ) and other such factors ( such as turn over ) .
Security of Tenure
The right of the tenant to continue to occupy the premises after the current lease expires. This is beneficial to tenants who want to retain their business address and avoid disruption, but can also help landlords to retain tenants for longer without the need to fully renegotiate the lease. Excluding security does however give the landlord greater future flexibility.
Stamp Duty Land Tax (SDLT) on Leases
Where the Net Present Value of a commercial lease is higher than the threshold for Stamp Duty Land Tax (SDLT), the tenant is usually responsible for calculating and paying SDLT within 14 days of the lease taking effect.
SDLT may also be payable on lease extensions, changes of terms and rent reviews, so it's crucial for commercial tenants to seek advice on this particular topic before signing a new lease, lease renewal or significant change of terms.
A court order may be required if you wish to evict squatters from a commercial property you own. Lanyon Bowdler are able to advise on the specific laws which apply to your premises, including squatters who were previously paying leaseholder tenants.
Termination of commercial leases is a common source of disputes, especially where the landlord or tenant on the receiving end feels the contract was terminated unfairly. We can help you to understand your rights and any reasonable legal action you can take.
If a tenant breaches their obligations under the terms of the lease - including failure to pay rent on time - it may seem logical to pursue them for payment. However, in legal terms this recognises that the lease continues and can represent a waiver of the landlord's right to forfeit the lease.
Instead of chasing the tenant to remedy the breach, landlords may prefer to have no contact with the tenant until the relevant forfeiture date is reached, at which point the legal position might be that the lease no longer applies and the landlord can retake possession of the premises.
Deciding when to take action and when to invoke forfeiture clauses is a complex area of commercial property leases, and we would encourage any affected landlords and tenants alike to seek legal advice immediately if such a situation arises.
In this episode you'll hear from commercial property lawyers Susan Grazier and Laura Lougher, who talk through a scenario which involves somebody taking their first commercial lease on a property, and they cover many of the potential pitfalls.
Commercial property landlords, like residential landlords, bear certain responsibilities, for example if the property needs repair work due to an incident that is not the fault of the tenant.
Lease negotiations can determine exactly what falls under the obligations of the landlord and what circumstances should be dealt with directly by the tenant. When it comes to tenant repair obligations the standard of repair expected of a tenant is important and can be costly on assessing dilapidations at the end of the lease.
It's important for both parties to protect their interests, for example by including terms to remedy any failure by either party to stick to their agreed responsibilities.
Without doing so, landlords face a greater risk of incurring repair costs which should have been paid by the tenant, while tenants could be left with premises that they are unable to trade from due to delayed repair work.
This area is not limited to concerns about the condition of the property. Commercial premises are more likely to be open to members of the public, which can also raise issues about health and safety, public liability and other risks to third parties coming on to the site.
Landlords will usually be held accountable for the condition of the building itself, including if it impacts on the health of a member of the public, so the terms of the lease should reflect this.
For example, the lease may include an obligation for tenants to notify the landlord of any damage to the building's floor, walls or roof, so any possible injury risks can be remedied immediately with minimal disruption to the business.
These are just a few examples of the issues that must be taken into account when defining and limiting landlords' responsibilities - the team at Lanyon Bowdler will always take into account your unique circumstances to ensure we identify any specific risks in your case.
Disputes between commercial landlords and tenants can arise for a variety of reasons, from conflicts of interest to a failure to meet agreed responsibilities in the lease.
It's usually better to prevent disputes from arising in the first place, than it is to deal with them later. That's why the Lanyon Bowdler team work hard to identify any potential problem areas in your lease so it can be renegotiated and, if necessary, rewritten to avoid future disputes.
We can also advise on ways to protect yourself against future disputes. That may mean obtaining indemnity insurance against any perceived breaches of restrictive covenants, or negotiating the terms of those covenants to allow you to use the premises as you wish.
Present-day disputes can arise from historic issues which are all but obsolete, such as minimal ground rents enshrined in historic leasehold agreements, or rights of public access that are rediscovered after many years of disuse.
Again, it's better to anticipate these kinds of problems and take preventative action ahead of time, rather than attempting to remedy them after the fact.
That's why Lanyon Bowdler's commercial property team put the work in upfront to protect both landlords and tenants against potential risks, so you know when you sign a new lease that you are not exposed to any avoidable costs or legal obligations.
Many of our commercial landlord and tenant clients are found across Mid and North Wales, The Marches and the Midlands, including cities like Birmingham and Wolverhampton. Our offices in Bromyard, Oswestry, Conwy, Ludlow, Hereford, Shrewsbury and Telford mean we are perfectly placed to serve the central region.
However, as a top-rated full-service law firm, our commercial property lawyers work on leasehold arrangements for premises right across England and Wales, as well as in Northern Ireland, so no matter where you are located, we can help.
You can contact us at your convenience by telephone or fill in our online form and a member of our team will get back to you as soon as possible to answer your enquiry.
We work on leasehold arrangements from a single commercial property up to multiple units on retail and industrial estates, or portfolios distributed across a wide geographic area. So no matter how complex your needs, Lanyon Bowdler can protect your interests.