12 Questions to Ask Before Signing a Commercial Lease

Signing a commercial lease is a major commitment for any business. Whether you're opening your first shop, relocating to a new office, or expanding, it's crucial to know exactly what you're agreeing to before you sign.

Before signing a commercial lease, you should ask questions that cover the lease term, rent, break clauses, repairs & maintenance, and lease termination.

At Wembley Solicitors, our commercial lease solicitors help business owners avoid costly mistakes by reviewing and negotiating lease terms that work in their best interests.

Don't sign a commercial lease without legal guidance. Call our commercial lease solicitors now on 0203 417 3700 or fill in our contact form for expert advice.

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What Is a Commercial Lease Agreement?

A commercial lease agreement is a legally binding contract between a landlord and a business tenant that allows the tenant to use a property for commercial purposes.

Unlike residential leases, a commercial lease is tailored to meet the unique needs of a business, and the terms are often open to negotiation.

The agreement outlines important details such as how long the lease will last, how much rent you'll pay, when payments are due, what the premises can be used for, who's responsible for repairs, and whether you're allowed to sublet or assign the lease. It also sets out what happens at the end of the lease, including whether you're expected to return the property in a certain condition or remove any changes you've made.

Because commercial leases can be complex and carry long-term financial commitments, it's crucial to understand all the terms before signing. Getting advice from an experienced commercial lease solicitor can help protect your business and ensure you're not agreeing to unfair or overly burdensome conditions.

12 Questions to Ask Before Signing a Commercial Lease

From legal obligations to financial commitments, here are 12 important questions to ask before signing a commercial lease:

1. Is the Property in the Right Location for Your Business?

The location of your premises can directly impact your business's success. You'll need to assess whether the property is easily accessible to your customers, staff, or suppliers and whether it aligns with your business goals. We work closely with local agents and can assist you in determining if the location is right for your needs.

2. Does the Property's Use Match Your Business Requirements?

The permitted use of a commercial property might not match your intended use. If you plan to operate differently from the existing use class, you may need to apply for planning permission or meet building regulations for alterations. These changes can be costly and time-consuming. We help identify whether the premises fall under your required use class and advise on the implications.

3. When Is Rent Due, and How Much Will You Pay?

Commercial rent is often paid quarterly, but depending on your cash flow, monthly payments might be more suitable. You should also consider rent reviews, potential rent-free periods, stepped rent increases, or charges like insurance rent. We negotiate with landlords on your behalf to ensure the terms suit your business's financial position.

4. Can You Assign or Sublet the Lease?

If your circumstances change, you may want to assign (transfer) or sublet the lease. Leases often contain restrictions, and some landlords require outgoing tenants to enter into an Authorised Guarantee Agreement (AGA). These obligations can become significant liabilities, so it's crucial to fully understand them before signing. We provide clear guidance on your rights and risks.

5. Is There a Service Charge, and What Does It Cover?

If you're leasing part of a building or estate, you may need to contribute towards communal services such as maintenance, cleaning, and repairs. This is known as a service charge. Understanding what services are included and how your share is calculated is essential to avoid unexpected costs. We carefully review these provisions and highlight any concerns.

6. What Is the Length of the Lease?

Consider how long you'll need the premises. Short-term leases may offer flexibility, while long-term leases can provide security. Whether you're a start-up or expanding business, the lease term should align with your plans. We help negotiate lease terms that match your business objectives.

7. Does the Lease Offer Protection Under the Landlord and Tenant Act 1954?

This Act gives tenants the right to renew their lease at the end of the term, unless excluded. Most landlords will try to exclude this protection. We can help you understand whether the lease is protected and advise if it's in your best interest to negotiate security of tenure.

8. Is There a Break Clause?

A break clause allows you (or the landlord) to end the lease early. This offers flexibility if your business needs change, but you'll need to understand the notice requirements and any conditions attached. We can negotiate a tenant-friendly break clause that works in your favour.

9. What Rights Are Included or Reserved?

It's important to know what rights the lease grants you, such as parking, storage, or access to shared areas, as well as which rights the landlord retains. If you need specific facilities or access rights for your operations, we ensure these are clearly included in your lease.

10. Is There a Rent Review Clause?

Most commercial leases include rent review provisions. These may be based on open market values, a fixed increase (stepped rent), or inflation (index-linked). Often, rent reviews are 'upward only', meaning rent can rise but not fall. We review the clauses to ensure you're not exposed to unexpected increases and that they're fair and transparent.

11. What Are Your Repairing Obligations?

Leases typically require tenants to keep the property in a good state of repair. Be cautious of clauses that require you to "put and keep" the property in repair, as this could mean repairing damage that existed before you moved in. A Schedule of Condition can limit your liability by documenting the property's condition at the start. We negotiate appropriate repair clauses and can refer you to professionals to prepare a schedule if needed.

12. What Are Your Responsibilities at the End of the Lease?

When your lease ends, you may be required to remove any fixtures or alterations, redecorate, or return the property in a particular condition. Some leases demand that these tasks meet the landlord's satisfaction, which can be subjective. We help clarify and negotiate end-of-lease obligations to ensure they are reasonable and cost-effective.

What Should I Consider Before Signing a Commercial Lease?

Before signing a commercial lease, it's important to consider whether the lease terms align with your business needs. Look at the length of the lease, the rent amount, and the payment schedule. Check whether you'll be responsible for repairs or service charges, and if the commercial property is already approved for your intended use.

Getting legal advice from a commercial lease solicitor can help you avoid common pitfalls and ensure the lease is suitable for your business.

Can I Change How I Use the Commercial Premises?

You may need planning permission if your intended business use differs from the property's current classification. Not every commercial lease agreement allows for a change of use. This is why it's crucial to confirm whether the property supports your business activities.

Our commercial lease solicitor can help identify restrictions and advise on the process of obtaining the necessary approvals.

What Is a Break Clause in a Commercial Lease?

A break clause gives you the legal right to end the lease early, which can offer much-needed flexibility if your business plans change. It's one of the most important questions to ask before signing a commercial lease. Not all leases include break options, and some have strict notice periods and conditions. Our team at Wembley Solicitors can negotiate fair break clauses that protect your business.

Will I Be Responsible for Repairs and Maintenance?

Most commercial lease agreements place some level of repair obligation on the tenant. Some may require you to 'keep' the property in good repair, while others ask you to 'put' it in good repair, which means fixing pre-existing issues.

Always ask about repair obligations before signing, and consider using a schedule of condition to limit liability. Our commercial lease solicitor can help ensure you're not taking on unfair responsibilities.

Why Getting Legal Advice Early Is Vital Before Signing a Commercial Lease?

Getting early legal advice helps you make informed decisions, avoid unexpected liabilities, and secure the best possible terms for your commercial property lease. It's a smart investment that protects your business in the long run.

• Understand the fine print: A commercial lease agreement can be full of complex terms, and legal advice helps you fully understand your obligations.
• Avoid hidden costs: Our solicitor can identify hidden charges such as service charges, repair obligations, or insurance rent.
• Negotiate better terms: Legal advice early on allows you to negotiate rent, lease length, break clauses, and more.
• Plan for the future: Our commercial lease solicitor ensures the lease supports your business's long-term growth and flexibility.
• Protect your business: With expert guidance, you reduce the risk of legal disputes, unexpected costs, or being tied into an unsuitable lease.
• Check for lease security: Our solicitor can advise whether your lease is protected by the Landlord and Tenant Act 1954 and explain what that means.
• Prevent costly mistakes: Once signed, a lease is legally binding; getting advice first helps you avoid making commitments you'll regret.

Speak to a Commercial Lease Solicitor

At Wembley Solicitors, our experienced commercial lease solicitors are here to support you from start to finish. With expert legal guidance, you can avoid costly mistakes, negotiate better terms, and protect your business interests.

If you need help in drafting, reviewing, or negotiating a commercial lease agreement, contact our commercial lease solicitors at 0203 417 3700.