North London Solicitors

North London Commercial Property/Leases FAQs

What things should I consider before signing a lease ?

• Given prevailing market conditions and rent for properties of a similar type in the locality, are you getting a good deal ?
• Is the lease negotiable?  In dire economic times, the answer is generally yes.
• What’s the position on service charges, repairs and dilapidations?  Are these clauses negotiable?
• Have you fully considered your legal obligations under the lease and what the lease allows you to do?  You might not, for example, be allowed to use the premises outside of certain hours.
• Is the property suitable for your business and business plan in the medium and long-term?  For example, is the property going to be big enough to accommodate your projected growth?
• Does the property have the facilities your business needs, such as separate toilets for staff and customers and off-road parking?
• Is the lease unreasonably long?  It is difficult to see five years into the future and if you take on a five year lease, for example, you are taking a gamble as to whether the property will be suitable for your business in five year’s time.

I want to contest the service charge I am being asked to pay on a commercial property.  How can I go about doing this ?

If you want to contest a service charge, you can make an application to the Residential Property Tribunal Service using Application Form S27A Landlord and Tenant Act 1985.  If your claim is accepted, it will be handled by the Leasehold Valuation Tribunal and your case will be allocated to one of three tracks.  Track one if for decisions to be made without a hearing.  Track two is for cases that require a hearing.  Track three is for cases which possibly require a pre-trial review as well as a hearing.  The Track your case is allocated to depends on the complexity of your case.

What can I do if I think the rent on a commercial property is too high ?

If you believe you are paying too much, you can refer it to the Rent Review Committee, so long as you do this within the first six months of your tenancy.

The Rent Review Committee will consider whether your rent is too high or not by comparing the amount you pay to other properties in the locality.  They will also ask what amount of rent can “reasonably expected” for the property you are renting.

What is “ground rent” ?

If you take out a lease on a property, you will have to pay rent to the freeholder to cover the costs of renting the land.  This is known as ground rent.  Quite often, the amount of ground rent you pay is fixed, although it could be increased incrementally after certain periods of time, so it is always wise to double-check.

If I assign my lease, does this end my obligations under it as a Tenant?

Not automatically. The first thing you will need to do is to check the lease. Many commercial leases include a specific stipulation that assignment (transfer) of the lease, where otherwise permitted, is also dependent upon the outgoing tenant signing an Authorised Guarantee Agreement (AGA) before allowing the assignment of the lease. This would mean that should the new tenant not be able to pay the rent or breaches the terms of the lease then the Landlord can seek the rent from the previous tenant.