Our commercial solicitors will give your business the expertise and advice it needs day-to-day. We can help you protect the value generated by your business.
Landlord and Tenant
Landlord and Tenant
Commercial Leases
Commercial leases describe a lease of a property that is used for commercial purposes.
A commercial lease will be a legally binding contract between the business Tenant (the company) and a Landlord.
Typically, it will be a fixed term lease of a commercial premises that is either a business tenancy or has been contracted out however, it may be a Full Repairing and Insuring Lease.
The lease gives the Landlord the right to use the property for business purposes or commercial activity for the time period set out within the lease.
Furthermore, the lease will outline the rights and responsibilities upon both the Landlord and the Tenant during the lease period.
The governing law of a commercial lease is the jurisdiction whether the property is located and the local council for the property will manage any disputes which may arise.
A lease will typically be signed by the Landlord (Lessor) and the Tenant (Lessee). However, in some circumstances a guarantor or surety may be required, who will agree to pay any losses directly to the Landlord of the Tenant is unable to pay the rent or is breach of the tenancy agreement.
We can advise you the following:
- Heads of terms
- Agreements for lease
- Drafting and negotiating leases
- Lease assignments
- Lease renewals
- Lease extensions
- Security of tenure
- Tenancy at will
- Break clause
- Service charge
- Rent deposits
- Stamp duty
- Disputes
- Funding
Provisions contained within a commercial lease
A typical commercial lease will cover the following:
- Type of property
- Address of the property
- Length of the tenancy and whether it can be renewed periodically or it is a fixed term.
- Amount of rent that will be charged and when it is payable.
- Types of businesses that can be carried out on the property.
- Who holds the responsibility for leasehold improvements.
- Security deposit provisions
Other areas that may be covered by a commercial lease:
- Provisions for lease renewal
- Provisions for improvement responsibilities upon the Landlord
- Provisions for improvement responsibilities upon the Tenant
- Subletting provisions
- Notice provisions for terminating the property.
- Who holds the responsibility for managing the insurance of the property.
Litigation
Civil litigation is the process by which a legal dispute is resolved either through Court proceedings or through negotiation. A dispute can cover a wide variety of matters, typically meaning one party is seeking a sum of money from another.
However, dispute can be a non-monetary form of remedy, such as a party allowing or prohibiting one party from taking a specific form of action.
Litigators are lawyers that specialise in civil litigation. Litigators will represent the parties in hearings, trials, arbitrations, and mediations.
Process
There are seven stages within the process of litigation, however not every dispute will pass through each of the stages of the litigation. These stages are listed below:
- Investigation
- Pleadings
- Discovery
- Pre-trial
- Trial
- Settlement
- Appeal
Initially the Claimant should send a letter before action setting out the basis of their claim to the Defendant. The Defendant should then send a letter of response and if the Defendant does so, the parties can enter into correspondence with a view to reach an agreement.
In the circumstance that the Defendant does not respond, or the correspondence breaks down, the Claimant can issue Court proceedings.
The value and nature of the claim determine which Court the claim should be commenced in and it is vital that the proceedings are issued at the correct Court, as any mistake can lead to delays in the matter being dealt with.
Once the Claimant has sent the proceedings to the Court, the Defendant will have a set timeframe in which to file a Defence to the proceedings. Any failure in filing the Defence may result in the judge making an order in favour of the Claimant.
If the Defence is filed, the Court will provide both parties with a set timeframe in which to comply with the Court’s Directions. Any failure to comply with the Court’s Directions can result in the claim being struck out.
Despite Court proceedings being issued, the Claimant and Defendant can continue to negotiate in an attempt to reach a settlement until the final Court Hearing (Trial).
Types of Civil Litigation we undertake
- Disputes and laws regarding Landlords and Tenants
- Construction
- Negligence
- Contractual disputes
Landlord and Tenant Disputes
Services for Landlords
- Tenants who fail to make their payments.
- Tenants who breach material clauses of the Tenancy Agreement.
- Requirement to repossess the property under the Tenancy Agreement.
- Disputes over who holds the responsibility to carry out repairs.
- Neighbouring disputes that the Tenant may have contacted you regarding.
- Local Authority Regulation issues
Services for Tenants
- Tenant being given notice to evict from the property and has given you notice to vacate.
- Tenant wishing to terminate the tenancy.
- Obstruction to use of the property and unlawful evictions.
- Disrepair of the property.
- Disputes over return of the deposit.
- Allegations for breach of terms of tenancy.
- Allegations of disturbance.
- Disputes with Local Authority.
Issues with tenants
When dealing with tenants of business premises who are in financial difficulties, it may be necessary to find a more creative solution rather than simply forfeiting the lease and finding a new tenant.
If the lease was assignment, then the lease may allow you to recover the rent from the original tenant.
Notices will have to be served within a strict timescale, however by serving a notice the Landlord may lose the right to recover rent.
An overriding lease may allow the original tenant to take possession of the premises from the new tenant, even if it is to try find a new tenant to assign the lease to.
Lease renewals under the Landlord and Tenant Act 1954 are more straightforward than they used to be in relation to legal obligations.
In the situation that the Landlord and their surveyor cannot reach a new deal with their tenant but are still willing to renew and wish to take out a new lease, they may choose to lodge their application to the Court.
Furthermore, the Court will always prefer for the parties to stay the Court proceedings and use the PACT Arbitration Scheme to determines the rent to be paid and the terms of the new lease.
If the tenant decides not to seek a renewal, there will be a dilapidations issues, which can be dealt with between the parties and their surveyors. However, if no agreement can be reached, Court action will be commenced as S146 notices need to be served with Schedules of Dilapidations.
Statutory reasons for the Landlord to refuse the grant of a new lease to the tenant
- State of the premises due to the tenant’s failure to repair and maintain.
- Persistent delay in the tenant paying the rent.
- Landlord has offered to obtain or provide the tenant an alternative premise on reasonable. terms and it is suitable for the nature of the tenant’s business needs.
- The tenancy is a sub let of party only of the premises and on expiry, the Landlord intends to dispose of the property.
- The Landlord intends to demolish or reconstruct or carry out substantial building works.
- The Landlord intends to occupy the property for their own business or residence.
Difficulties the Tenant may face
- Tenant requires Landlord’s consent to carry out some works such as assigning the lease to someone else and subletting part of the premises, but the Landlord is delaying their decision or is unreasonably refusing consent.
- There are issues with the building and both Landlord and Tenant are in dispute over who’s responsibility it is to rectify the issues.
- Landlord is not willing or terms in demand are not acceptable to the Tenant in regard to renewing the lease.
- Tenant wishes to leave the premises early by virtue of the break clause.
- Dealing with the Dilapidations effectively especially in situations where the Landlord produces a Schedule of Dilapidations which may be expensive for the Tenant to implement.
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FisherWright Solicitors Limited is authorised and regulated by the Solicitors Regulation Authority, SRA ID 622283. FisherWright Solicitors is the trading name of FisherWright Solicitors Limited Company Reg: 09536645