A lease is usually one of the largest commitments a business makes. Once it is signed, the terms are difficult to change, so the time to raise questions is before you commit.
1. Term and options to renew
Check how long the lease runs, whether you have an option to renew, and what you must do, and by when, to exercise it. Missing a notice deadline can mean losing the option altogether.
2. Rent reviews
Understand how and when the rent will change: by a fixed percentage, by an index, or to market. A market review clause without a clear process can lead to disagreement.
3. Outgoings and costs
Many leases pass building costs on to tenants. Ask for a list of the outgoings you will pay and an estimate of the annual amount.
4. Repairs and make-good
Find out what you are responsible for during the lease and what condition the premises must be in when you leave. Make-good obligations can be expensive if they are not defined.
5. Assignment and subletting
If you may sell the business or need less space, check whether you can transfer or sublet the lease, and on what conditions.
Before you sign
- Ask for all documents, including any disclosure the landlord must provide.
- Keep a record of what was agreed in negotiation, and check that it appears in the lease.
- Diarise every notice date as soon as the lease is signed.
This article is general information only and is not legal advice. The law and its application vary with your circumstances; please seek advice before acting.