Taking on a New Business Lease – Part 1

A tenant or landlord will sometimes sign a lease without taking any legal advice. This can leave the party open to the danger of signing a lease which is unfair, resulting in serious and expensive problems in the future.

It is therefore always advisable that you instruct a solicitor to advise you independently and in your best interests.

This is a two-part article looking at the arrears that should be considered when taking on a new commercial/business lease. Please note that the following list is non-exhaustive.

Heads of termsÂ

These are the principal terms of the lease, and are often prepared by the letting agents. They are usually very brief, and so they can create uncertainties. This means that more time is spent by the solicitors on negotiating the details for the parties. Parties are advised that they spend more time on the detail for the individual clauses in the Heads of Terms as this saves time and legal expenses in the long run.


There are three searches that every tenant is recommended to have and it must be borne in mind that if a lender is involved in the transaction, it will also require the searches:

Local Authority: This will show the recent planning history, highway proposals, compliance with statutory regulations affecting the property and other disclosed items listed in a public register.

Water and Drainage: This will indicate whether the property is drained, for both foul and surface water, into a public sewer and whether the property is served by a mains water supply and if there is a water meter.

Environmental: This reveals any previous and nearby potential contaminative users, and whether the property is in a flood basin. Audited Environmental Reports from a suitable professional firm are necessary where there is a proposed new development where the planning authority may impose this as a planning condition before granting planning permission. This is expensive, but can be worth the extra expense for peace of mind.

Other searches: These include public utility searches, commons registration, index map, coal mining, verderer, chancel repair liability, and village green and open spaces searches.

It is strongly advisable that you instruct a solicitor and take independent legal advice when taking on a new business or commercial lease. Please contact our Commercial Property department and speak to one of our solicitors who will be happy to assist and advise.

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