All Commercial Leases should contain the Land Registry Prescribed Clauses (which were made compulsory from 19th June 2006), which include the following –
- 1. Clauses dealing with the description of the property to be leased, the length of lease and the amount of rent.
- 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
- Covenants on the part of the landlord
- Not to disturb tenant so long as tenant complying with his obligations
- To insure the building
- 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
- Guarantor obligations
- These are set out if a Guarantor is party to the Lease
- 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
