This is Part 2 (of 2) of the article in which we continue to look at the arrears that should be considered when taking on a new commercial/business lease. For information on the Heads of Terms and Searches, please see Part 1.
I have already outlined the concerns where a party to a lease transaction signs a lease without taking any legal advice, as there is the risk that the party is signing a lease which is unfair, thus resulting in serious and expensive problems in the future.
Please note that the following list is non-exhaustive.
This is necessary for any type of property transaction. This process will confirm whether the Landlord has the right to grant the lease. It will also ascertain any restrictions or covenants affecting the property or its use / intended use.
These usually take the form of mortgages. The terminology applied here is that the lender is known as a mortgagor and borrower is known as the mortgagee.
Most Lenders will instruct independent solicitors to act for them, and the Tenant’s solicitor will negotiate any relevant mortgage documentation with the lender’s solicitors, and satisfy the lender’s requirements relating to title and search requests, making any pre-contract enquiries, and satisfying all execution requirements and registration of the Legal Charge with the Land Registry.
Where the property to be charged is leasehold, the lender may require a full Lease Report – this can be very lengthy and detailed.
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.