Commercial Lease Clauses

All Commercial Leases should contain the Land Registry Prescribed Clauses (which were made compulsory from 19th June 2006), which include the following –

  1. 1. Clauses dealing with the description of the property to be leased, the length of lease and the amount of rent.
  2. 2. Covenants on the part of the tenant –
    • to pay the rent
    • to pay outgoings
    • to pay VAT if the landlord charges this
    • to reimburse the landlord the cost of the buildings insurance and to pay any increases in premium as a result of actions or neglects of the tenant
    • to repair
    • to allow the landlord to enter and carry out repairs on tenants failure to do so – provisions for recovery of cost incurred
    • against alterations
    • to comply with planning legislation
    • to comply with statutes
    • to use the property only for purpose permitted by lease
    • dealing with assignments or subletting – either prohibiting this or if it is permitted setting out the terms upon which it will be permitted
    • not to cause nuisance or mess etc
    • not to put up signs without consent
    • to pay all costs incurred by landlord as a result of breaches of the lease terms
    • to hand the premises back at termination
  3. Covenants on the part of the landlord
    • Not to disturb tenant so long as tenant complying with his obligations
    • To insure the building
  4. Mutual agreements between landlord and tenant dealing with
    • forfeiture and the circumstances that give rise to this
    • suspension of rent in the event of destruction or damage to the building by some risk insured against
  5. Guarantor obligations
    • These are set out if a Guarantor is party to the Lease
  6. Other clauses

Clauses that may be included depending on the circumstances are:

    • – Rent review
    • – Break clause
    • – Exclusion of security of tenure
    • – Service charge
    • – Rights over common parts

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